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Ag Economy Barometer Falls To Lowest Level In Two Years
Purdue University’s September Ag Economy Barometer has fallen to its lowest point in two years.
It’s been harder than usual this season for farmers to make a profit. And that’s driving down how the ag sector feels about its future.
Attitudes had improved August, just after President Donald Trump announced a small farm bailout package aimed at softening the effects of his tariff squabble with China. But barometer co-author and Purdue agricultural economist Michael Langemeier says with harvest time in full swing and farmers struggling to make back what they invested, producers are now less optimistic.
“People are expecting pretty tight margins this fall and really their financial situation has not improved compared to last year and it doesn’t look like it’s going that much better over the next 12 months,” he says.
What Langemeier says he found important to note was not only current condition sentiments dropping, but also future expectations falling from the previous month.
“We ask a question directly related to whether this is a good time to make large investments in machinery and equipment,” he says. “A lot of people said this is a bad time to make those investments and that was the highest percentage of people thought this was a bad time in quite some time and so people were quite negative even looking relatively long term.”
The most recent survey included questions for producers about whether they saw net income taking a hit this year and if farmers were looking to store their corn and soybeans rather than sell them now. Langemeier says the responses show farmers are changing their storage habits due to President Trump’s trade war shrinking demand.
“A fairly large percentage of the producers said yes they were going to store a higher percent of their soybeans this year in part due to the trade conflict,” says Langemeier.
He says projected high yields also influence that decision.
“Usually when you have big crops, it pays to store for a few months and so that’s certainly what we’re seeing,” says Langemeier.
He says he thinks a trade pact recently signed with Canada and Mexico could boost sentiments in next month’s survey.
The report polls 400 full-time agricultural producers nationwide each month to gauge attitudes about the agricultural economy.