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Farmer sentiment regarding current conditions slips in September

Ag Barometer Outlook Farmer sentiment regarding current conditions slips in September. (Purdue/CME Group Ag Economy Barometer/James Mintert)

Farmers became much more pessimistic about current conditions on their own farms and in the U.S. agricultural economy in late summer, according to the September Purdue University/CME Group Ag Economy Barometer. While the overall Ag Economy Barometer reading dipped slightly to a reading of 121, down three points from August; the Index of Current Conditions, a sub-index of the barometer, dropped 22 points to a reading of 100. The barometer is based on a mid-month survey of 400 agricultural producers across the U.S.

Farmers’ outlook toward making large investments such as machinery or buildings also declined in September. The Farm Capital Investment Index dropped for the second month in a row, down nine points from August, which left it 20 points below the July 2019 reading taken when corn and soybean prices were peaking. Producers’ farmland value expectations for both the next 12 months and 5 years also drifted lower in September.

Despite the weak near-term outlook provided by farmers, they expressed some optimism about the future as the Index of Future Expectations, another sub-index of the Ag Economy Barometer, rose 6 points compared to August. “Even though farmers are concerned about the near-term, both on their own farms and for the ag economy, improved crop growing conditions during the last half of the summer appeared to boost optimism regarding the future,” said James Mintert, the barometer’s principal investigator and director of Purdue University’s Center for Commercial Agriculture.

In the September survey, only one in five producers said they expect profitability to decline over the next year, compared to 41 percent that expected a profitability decline when the same question was posed back in May. “Considered jointly with this month’s decline in the Index of Current Conditions,” said Mintert, “this could be a signal that growers expect better times in 2020 compared to 2019, possibly because they are looking forward to a return to more normal growing conditions and crop production in 2020.”

Read the full September Ag Economy Barometer report at https://purdue.ag/agbarometer. This month’s report includes insights into producers’ perspectives towards a favorable outcome to the trade dispute and their cropland rental arrangements. 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, Purdue Center for Commercial Agricultural Director James Mintert 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 ratesequity indexesforeign exchangeenergyagricultural 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. 

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