WEST LAFAYETTE, Ind. and
CHICAGO, April 7, 2020 /PRNewswire/ -- The Purdue University/CME Group Ag Economy Barometer
recorded its largest one-month drop in sentiment during March. The
barometer dipped 47 points to a reading of 121, as concerns over
the impact of the global pandemic on the agricultural economy
weighed heavily on farmers' minds. The Ag Economy Barometer is
based on a mid-month survey of 400 U.S. agricultural producers and
was conducted from March 16-20, 2020
as the coronavirus crisis escalated in the U.S. and around the
world.
Both the Index of Current Conditions and Index of
Future Expectations also recorded their largest one-month
declines. Farmer sentiment regarding current conditions fell 43
points to a reading of 111 and future expectations fell 49 points
to a reading of 126. Collectively, this month's decline in the
barometer and its sub-indices pushed the index down to levels last
seen in September 2019, when weak
commodity prices and an unresolved trade dispute left many farmers
concerned over their financial futures.
"First and foremost, the U.S. farmers we surveyed said they were
concerned about how the coronavirus will impact their farms in 2020
leaving little doubt that it was the leading driver for this
month's drop in sentiment," said James
Mintert, the barometer's principal investigator and director
of Purdue University's Center for
Commercial Agriculture. "While originally it was thought that the
coronavirus effect would be limited to trade with China, now it appears producers are bracing
for challenging financial times leading into the 2020 planting
season."
To further understand the impact of the coronavirus on this
month's drop in sentiment, producers were asked whether they felt
the virus would effect their farm's bottom line in 2020.
Seventy-four percent of respondents to the March survey said they
were either "fairly worried" (34 percent) or "very worried" (40
percent) about the impact of the virus on their farm's
profitability this year. That sentiment also spilled over into
their perceptions of financial performance, with 40 percent of
respondents expecting a worse year compared to 2019.
Farmers also became less optimistic in March about the outcome
of the trade dispute with China
and whether it would be resolved in a way that benefits U.S.
agriculture. The percentage of farmers expecting the soybean trade
dispute with China to be resolved
soon, which peaked in January at 69 percent, fell to 47 percent in
March. Meanwhile, the percentage of producers that expect the trade
dispute to be resolved in a way that's ultimately beneficial to
U.S. agriculture was down to 68 percent this month from an average
of just over 80 percent who felt that way in January and
February.
Lastly, in another sign that farmers were less confident that
the trade dispute with China will
be resolved soon, more farmers in the March survey said they expect
to receive an MFP payment on their 2020 crop production than did a
month earlier. In March, 62 percent of survey respondents said they
anticipate USDA providing MFP payments to U.S. farmers for the 2020
crop year. That was a significant increase compared to February
when just 45 percent of farmers said they expect to receive an MFP
payment this year.
Read the full Ag Economy Barometer report at
https://purdue.ag/agbarometer. This month's report provides further
insight into producer's sentiment towards making large farm capital
investments as well as their expectations for short-term and
long-term farmland values. 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, the Purdue Center for Commercial Agricultural
provides a short video analysis of the barometer results, available
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
Mercantile Exchange Inc. All other trademarks are the property
of their respective owners.
Writer: Kami Goodwin,
765-494-6999, kami@purdue.edu
Source: James Mintert, 765-494-7004,
jmintert@purdue.edu
Related website:
Purdue University Center for Commercial
Agriculture: http://purdue.edu/commercialag
CME Group: http://www.cmegroup.com/
Photo Caption: Farmer sentiment plummets as coronavirus concerns
rise. (Purdue/CME Group Ag Economy
Barometer/James Mintert)
A publication-quality photo is available at
https://news.uns.purdue.edu/images/2020/march-barometer.jpg
CME-G
View original
content:http://www.prnewswire.com/news-releases/farmer-sentiment-plummets-as-coronavirus-concerns-rise-301036506.html
SOURCE CME Group