WEST LAFAYETTE, Ind. and
CHICAGO, July 7, 2020 /PRNewswire/ -- Farmer sentiment
improved in June for the second month in a row, rebounding from
sharp declines that took place in both March and April, according
to the Purdue University/CME Group Ag
Economy Barometer. The index was up 14 points from May to a reading
of 117. The Ag Economy Barometer is based on responses from
400 U.S. agricultural producers with this month's survey conducted
from June 22-26, 2020.
Ag producers became more optimistic about both their current and
future farming operations compared to a month earlier. The Index
of Current Conditions rose 19 percent from May to a reading of
99, and the Index of Future Expectations climbed 12 percent
from May to a reading of 126. Over the last two months, farmers'
perspective regarding making large investments in their farming
operations improved markedly. The Farm Capital Investment
Index recovered to a reading of 60 in June, compared to just 50
a month earlier and a reading of 38 in April. Although much
improved since bottoming out in April, the recovery still left the
Farm Capital Investment Index 12 points below the 2020 high
established in February, before coronavirus impacted markets.
"This month's survey was conducted after the USDA announced
details regarding the Coronavirus Food Assistance Program (CFAP),"
said James Mintert, the barometer's
principal investigator and director of Purdue
University's Center for Commercial Agriculture. "A more
favorable spring planting season combined with assistance from CFAP
help explain this month's improvement in farmer sentiment, yet a
majority of producers believe additional economic assistance will
be needed in 2020."
Despite their concerns, when asked about the impact of the virus
on their farms' profitability, 64 percent of respondents indicated
they were "very worried" or "fairly worried", down from 71 percent
in May. The June survey provided the first opportunity to survey
farmers after details about the CFAP were made available. Sixty
percent of surveyed farmers indicated that CFAP "somewhat" (53
percent) or "completely" (7 percent) relieved their concerns about
the impact of the virus on their 2020 farm income while just over
one-fourth of respondents (26 percent) responded "not at all."
However, 64 percent 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 their short-run outlook for land values,
farmers' perspective improved over the last two months. Respondents
expecting land values to decline over the next 12 months fell to 21
percent in June, down from 29 percent in May and 35 percent in
April. The shift in perspective was even more pronounced when
farmers were asked about farmland values in five years. Fifty-five
percent of respondents said they expect farmland values to rise
over the next five years, up from just 40 percent in May.
Meanwhile, just 17 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, down from 27 percent that
planned to do so back in May.
Read the full Ag Economy Barometer report at
https://purdue.ag/agbarometer. This month's report includes insight
into farmers' profitability expectations, their plans for machinery
purchases in the upcoming year and their concerns about the ethanol
industry's future. 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 Agriculture provides a short video
analysis of the barometer results, available at
https://purdue.ag/barometervideo, and for even more information,
check out the Purdue Commercial AgCast podcast. It includes
a detailed breakdown of each month's barometer, in addition to a
discussion of recent agriculture news that impacts farmers.
Available now at https://purdue.ag/agcast.
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 &
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of their respective owners.
Writer: Torrie Sheridan,
765-496-6032, ward121@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: Farmer sentiment rebounds amidst ongoing COVID-19
concerns. (Purdue/CME Group Ag Economy
Barometer/James Mintert)
A publication-quality photo is available at
https://www.purdue.edu/uns/images/2020/barometer-june.jpg.
CME-G
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SOURCE CME Group