WEST LAFAYETTE, Ind. and
CHICAGO, July 5, 2016 /PRNewswire/ -- Producer
sentiment surrounding the U.S. agricultural economy rebounded in
June after a dip in May, according to the latest survey results
from the Purdue/CME Group Ag Economy Barometer.
The June Producer Sentiment Index landed at 104, up seven points
from the May reading. The index is based on a monthly survey of 400
U.S. agricultural producers and includes measures of sentiment
surrounding both current conditions and future expectations.
Barometer principal investigator Jim Mintert said the increase
can be at least partially attributed to stronger overall grain and
oilseed markets over the last three months. In June, corn and
soybean both traded at prices not seen since summer 2015. Soybean
prices approached $12 per bushel,
well above $8.75 that producers saw
in April.
"Evaluating the barometer more closely shows us that the uptick
in producer sentiment was driven primarily by an improvement in the
Index of Current Conditions, which jumped from 83 in May to 98 in
June," said Mintert, who is the director of Purdue's Center for Commercial Agriculture and a
professor of agricultural economics. "Additional increases in
overall producer sentiment came from the Index of Future
Expectations, which settled slightly higher at 107, up three points
since May."
"Surveys over the last three months also have shown that
producers view their own farm operations' financial health
differently than they view the health of the overall agricultural
economy," said David Widmar, Purdue
research associate who works on the barometer.
"Producers hold a more pessimistic view of their own farms'
financial situations than they do of the agricultural economy," he
said.
For example, after declining significantly in April, the number
of producers expecting their farm operations to be worse off
financially in a year moved higher, increasing from just 27 percent
in April to 37 percent in June.
In contrast, the share of respondents who expected financially
bad times for the overall agricultural economy in the next 12
months trended lower over the same time period, declining from 75
percent in April to 65 percent in June.
"The reasons why these sentiments vary isn't clear, but a
continuation of the trend could be a sign that producers will
emphasize controlling costs through reduced spending," Widmar
said.
One factor weighing heavily on producers' minds is the summer
weather. While farmers always have to deal with the weather, there
has been some concern surrounding the possibility of La Niña
setting in and the impact it could have on U.S. corn and soybean
production.
"Barometer researchers included weather-related questions on the
June survey given the impact that weather speculation already has
had on rising grain and oilseed market prices," Mintert said.
Producers were asked about the likelihood of widespread adverse
impacts on 2016 crop yields associated with extreme weather events.
About 44 percent of respondents reported that they felt this was at
least somewhat likely to happen. When asked about the likelihood of
weather-related yield loss in their local areas, just over half of
survey respondents - 53 percent - reported that they expect extreme
weather to reduce crop yields in 2016.
Researchers also asked producers whether they had changed their
farms' marketing plans because of the potential for extreme weather
events in the next year. Nearly 30 percent of respondents said they
had.
To read the full June report, access additional resources,
including webinar archives and schedules, and sign up to receive
monthly barometer email updates, visit
http://purdue.edu/agbarometer.
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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