WEST LAFAYETTE, Ind. and
CHICAGO, Oct. 3, 2017 /PRNewswire/ -- Producers' optimism
about the future of the agricultural economy fell in September,
according to the Index of Future Expectations, a sub-index of the
Purdue University/CME Group Ag Economy Barometer.
The overall barometer held steady from August to September with
a reading of 132 as its two sub-indices – the Index of Future
Expectations and the Index of Current Conditions – shifted in
opposite directions. The Index of Future Expectations fell seven
points to 130 in September, while the Index of Current Conditions
climbed from 122 in August to 135 in September. The Ag Economy
Barometer is based on a monthly survey of 400 U.S. agricultural
producers.
"Although the decline in the Index of Future Expectations was
modest, it could be an indication that some of the optimism that
surfaced among producers in late 2016 and early 2017 is eroding,"
said Jim Mintert, director of Purdue's
Center for Commercial Agriculture and principal investigator for
the barometer. "One of the drivers of the jump in producer
sentiment after the 2016 U.S. presidential election was a sharp
increase in expectations about the U.S. economy. But the last two
times the barometer survey has posed questions about the overall
economy, respondents were noticeably less optimistic."
For example, on the September survey, just 40 percent of the
respondents said the U.S. economy was likely to expand, a decline
of almost one-third from March when nearly 60 percent said they
expected expansion.
Another topic on the September survey was trade agreements and
negotiations, specifically the North American Free Trade Agreement,
or NAFTA. The survey asked respondents whether NAFTA has been good
or bad for the U.S. economy and, separately, for U.S. farmers and
ranchers. In both cases, more producers than not reported that the
agreement had been good. In the case of the U.S. economy, 52
percent of respondents said they thought NAFTA had been good.
Fifty-nine percent reported that they thought the agreement had
been good for U.S. farmers and ranchers.
In contrast, back in February, 93 percent of respondents said
trade was important to the U.S. agricultural economy and 80 percent
of producers said trade was important to their farms. The
differences among the responses to the more general trade questions
and those that focused specifically on NAFTA suggest there is some
uncertainty among producers about the impact of NAFTA, Mintert
said.
Moreover, Mintert said, just looking at the percentage of
favorable responses regarding the impact of NAFTA might not tell
the whole story.
"An unusually large percentage of survey participants - 24
percent in the case of the U.S. economy and 20 percent in the case
of farmers and ranchers - opted not to answer these two questions,"
he said. "Although we can't say for sure why producers opted not to
respond to these two questions, it might also reflect a relatively
high degree of uncertainty regarding NAFTA's impact."
The full September report includes more information about
producers' sentiment toward NAFTA, their expectations for the stock
market in 12 months, and what they think might happen with the U.S.
economy in the next year. Read the full report at
http://purdue.edu/agbarometer.
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.
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