Study: Confidence in the Ag Economy Soars Despite Large Prevented Plantings, Trade Talk Unknowns
The Purdue University/CME Group Ag Economy Barometer reading jumped to 153 in July, up 27 points from June, and up 52 points from May. Improving crop conditions after an extraordinarily wet planting season, combined with a late spring/early summer crop price rally, boosted farmer sentiment. This improvement occurred despite the fact that many producers were in the midst of filing prevented planting crop insurance claims and wondering about the size of the USDA’s 2019 Market Facilitation Payments (MFP). Results are based on a survey of 400 agricultural producers across the U.S. conducted from July 15 through July 19, 2019, which was prior to USDA’s announcement of 2019 MFP payment rates.
A big driver of sentiment was producers’ improved expectations for current economic conditions. The Index of Current Conditions, a sub-index of the ag barometer, increased 44 points in July to a reading of 141, marking the largest one month improvement since data collection began in October of 2015. The barometer’s other sub-index, the Index of Future Expectations, also increased, up 18 points from June, to a reading of 159 in July.
“The Corn Belt is continuing to see better crop conditions and that has farmers, at least momentarily, breathing a sigh of relief. However, the agricultural economy is still in flux,” said James Mintert, the barometer’s principal investigator and director of Purdue University’s Center for Commercial Agriculture. “The impact of prevented planting on 2019 corn and soybean acreage and prices along with the outcome of trade talks with China remain unknown.”