WEST LAFAYETTE, Ind. and
CHICAGO, May 7, 2019 /PRNewswire/ -- In April,
agricultural producer sentiment plunged as the Purdue University/CME Group Ag Economy Barometer
declined 18 points to a reading of 115, down from 133 in March. The
barometer, a sentiment index, is based on a monthly survey of 400
agricultural producers across the U.S. This marks the fourth
largest one-month drop since data collection began in October 2015.
The barometer's decline was driven by both worsening perceptions
of both current economic conditions and weaker expectations for the
future. The Index of Current Conditions fell 21 points to a reading
of 99, and the Index of Future Expectations declined 16 points to a
reading of 123.
"Farmers are becoming increasingly anxious over their
future financial performance," said James
Mintert, the barometer's principal investigator and director
of Purdue University's Center for
Commercial Agriculture. "Producers have taken stock of their
financial position and prospects for 2019 as they head into
planting season and are concerned about the uncertainty arising
from the on-going trade disputes with key ag trading partners.
Right now it seems that producers are being cautious."
That caution is seen in producers' attitudes toward making large
investments in their farming operation. In the April survey, when
asked whether they feel now is a "good time" or "bad time" to make
large farm investments, only 22 percent of farmers stated it was a
"good time" while 74 percent stated it was a "bad time." That
combination pushed the Large Farm Investment Index down 9 points
compared to March.
Producers also expressed less optimism regarding prospects for
resolution of the on-going soybean trade dispute with China. On the April survey, only 28 percent of
respondents felt that the dispute would be resolved before
July 1, down from 45 percent in
March. However, 71 percent still feel the dispute will ultimately
be resolved in a way that benefits U.S. agriculture. In a separate
question, when asked whether they felt that the U.S. should rejoin
the Trans-Pacific Partnership (TPP), 47 percent were favorable, 28
percent were not in favor, and 25 percent stated they were
uncertain.
Since January, more survey respondents are indicating they have
concerns about commodity prices. As a result, Purdue researchers asked additional questions
related to commodity prices in order to understand producers'
perspectives on the future direction of corn and soybean futures
prices. For the past four months, those results have been compared
with futures and options market-based probability estimates to
determine whether there is a significant difference in sentiment
between the producers and futures and options market participants.
Early findings indicate producers have consistently had a more
negative outlook compared to those who participate directly in the
futures and options markets. Moreover, producers became relatively
less optimistic over the course of the winter and early spring.
This increasingly pessimistic view of corn and soybean prices may
be playing a role in the reduction in barometer sentiment as well
as the recent drop in both the Index of Current Conditions and the
Index of Future Expectations.
Read the full April Ag Economy Barometer report at
https://purdue.ag/agbarometer. The report includes insights into
producers' year-over-year attitudes toward farmland values and a
breakdown of the comparison between producers and futures market
participants regarding the future direction of corn and soybean
futures. The site also offers additional resources, such as past
reports, charts and survey methodology, and a form to sign up for
monthly barometer email updates and webinars. Each month Dr.
Mintert also provides an in-depth analysis of the barometer. That
video can be viewed at https://purdue.ag/barometervideo.
The Ag Economy Barometer, Index of Current Conditions and Index
of Future Expectations are available on the Bloomberg Terminal
under the following ticker symbols: AGECBARO, AGECCURC and
AGECFTEX.
About the Purdue University
Center for Commercial Agriculture
The Center for Commercial
Agriculture was founded in 2011 to provide professional development
and educational programs for farmers. Housed within Purdue University's Department of Agricultural
Economics, the center's faculty and staff develop and execute
research and educational programs that address the different needs
of managing in today's business environment.
About CME Group
As the world's leading and most
diverse derivatives marketplace, CME Group (www.cmegroup.com)
enables clients to trade futures, options, cash and OTC markets,
optimize portfolios, and analyze data – empowering market
participants worldwide to efficiently manage risk and capture
opportunities. CME Group exchanges offer the widest range of global
benchmark products across all major asset classes based
on interest rates, equity indexes, foreign
exchange, energy, agricultural
products and metals. The company offers futures and
options on futures trading through the CME Globex® platform, fixed
income trading via BrokerTec and foreign exchange trading on the
EBS platform. In addition, it operates one of the world's
leading central counterparty clearing providers, CME
Clearing. With a range of pre- and post-trade products and
services underpinning the entire lifecycle of a trade, CME Group
also offers optimization and reconciliation services through
TriOptima, and trade processing services through Traiana.
CME Group, the Globe logo, CME, Chicago Mercantile Exchange,
Globex, and, E-mini are trademarks of Chicago Mercantile Exchange
Inc. CBOT and Chicago Board
of Trade are trademarks of Board of Trade of the City of Chicago, Inc. NYMEX, New York
Mercantile Exchange and ClearPort are trademarks of New York
Mercantile Exchange, Inc. COMEX is a trademark of Commodity
Exchange, Inc. BrokerTec, EBS, TriOptima, and Traiana are
trademarks of BrokerTec Europe LTD, EBS Group LTD, TriOptima AB,
and Traiana, Inc., respectively. Dow Jones, Dow Jones
Industrial Average, S&P 500 and S&P are service and/or
trademarks of Dow Jones Trademark Holdings LLC, Standard &
Poor's Financial Services LLC and S&P/Dow Jones Indices LLC, as
the case may be, and have been licensed for use by Chicago
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property of their respective owners.
Writer: Kami Goodwin,
765-494-6999, kami@purdue.edu
Source: Jim Mintert,
765-494-4310, jmintert@purdue.edu
Related website:
Purdue
University Center for Commercial Agriculture:
http://purdue.edu/commercialag
CME Group: http://www.cmegroup.com/
Photo Caption: Producer sentiment plummets; trade dispute
and weak financial performance wear on farmers. (Purdue/CME Group Ag Economy Barometer/James Mintert)
A publication-quality photo is available at
https://news.uns.purdue.edu/images/2019/april-barometer.jpg
CME-G
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SOURCE CME Group