WEST LAFAYETTE, Ind. and
CHICAGO, June 2, 2020 /PRNewswire/ -- Farmer
sentiment improved slightly in May after falling sharply in both
March and April, according to the Purdue
University/CME Group Ag Economy Barometer. The index was up
7 points from April to a reading of 103, but it remained nearly 40
percent below its all-time high of 168 set in February 2020. The Ag Economy Barometer is
based on responses from 400 U.S. agricultural producers and this
month's survey was conducted between May
18-22.
The Index of Current Conditions improved in May, up 11
points from April to a reading of 83, as did the Index of Future
Expectations, up 4 points to a reading of 112. In May, farmers
were also somewhat more inclined to think now is a good time to
make large investments in their farming operations. The Farm
Capital Investment Index rose to a reading of 50 compared to
just 38 a month earlier. While collectively all three of these
indices improved in May, each was down more than 30 percent
compared to February 2020, before
coronavirus impacted markets.
"This month's survey was conducted the same week that USDA
announced the details of the Coronavirus Food Assistance Program
(CFAP) so awareness of that program's details could be one of the
key reasons for this month's barometer improvement," said
James Mintert, the barometer's
principal investigator and director of Purdue
University's Center for Commercial Agriculture. "Yet some
farmers remain worried about their bottom line and are still
looking for options to alleviate those concerns."
In the May survey, more than 70 percent of respondents indicated
they were "very worried" (34 percent) or "fairly worried" (37
percent) about the impact of coronavirus on their farm's
profitability, up from 67 percent in April. Their two biggest
concerns were market access (42 percent) and financial (39
percent), with health and safety (11 percent) coming in third.
Providing further evidence of their financial concerns, two-thirds
of farmers surveyed indicated they think it will be necessary for
Congress to pass another bill to provide more economic assistance
to U.S. farmers.
When asked about expectations for their financial position over
the next 12 months, over 60 percent said they expect farmers'
equity positions to decline over the next year, up sharply compared
to 28 percent of farmers who felt that way in February 2020. Meanwhile, over 25 percent of
farmers surveyed who rent farmland said they expect to ask their
landlords to lower their cash rental payments in 2021 as a result
of COVID-19. Mintert suggested this could lead to downward pressure
on cash rental rates next year.
Read the full Ag Economy Barometer report at
https://purdue.ag/agbarometer. This month's report includes insight
into producers concerns over the ethanol demand and expectations
for 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
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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 &
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of their respective owners.
Writer: Kami Goodwin,
765-494-6999, kami@purdue.edu
Source: James Mintert, 765-494-7004,
jmintert@purdue.edu
Related websites:
Purdue University Center for Commercial
Agriculture: http://purdue.edu/commercialag
CME Group: http://www.cmegroup.com/
Photo Caption: XXX. (Purdue/CME
Group Ag Economy Barometer/James
Mintert)
A publication-quality photo is available at
https://news.uns.purdue.edu/images/2020/may-barometer.jpg.
CME-G
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SOURCE CME Group