Producer sentiment is up in latest ag economy barometer
Farmers are more optimistic about the agricultural trade outlook, according to the latest Purdue University/CME Group Ag Economy Barometer.
But, Jim Mintert, with the Purdue Center for Commercial Agriculture, says the survey was taken before markets reacted to the coronavirus.
“We collected data from February 10-14 and if you’ve been tracking the markets, that was the time frame before we saw the big downturn in stock market prices and the biggest impact on commodity prices as well,” he says. “Although people were aware of the existence of the COVID-19 virus when we were collecting data, we hadn’t seen the negative impact on the markets that we’ve seen since then so I think that’s a caveat with respect to our results for this month.”
He says it remains to be seen what impact the disease’s footprint around the world will have on farmer sentiment on the next survey.
Farmers surveyed had a positive response regarding the resumption of trade with China. Sixty percent of farmers said they believed the trade dispute with China will be settled soon and 80 percent said the trade dispute with China will be resolved in a way that’s favorable to US agriculture.
Mintert says producers also indicated that they believe Market Facilitation Program payments will be made in 2020.
“On the February survey, 45 percent said they expect to see a MFP payment in 2020 and that’s another indication that people were optimistic about trade,” he says.
They survey took place before President Trump tweeted that another round of MFP payments would be made if needed. Since then, Ag Secretary Sonny Perdue has told producers not to plan for another round of MFP.
The overall barometer was 168 in February, compared to 167 in January. The one-point rise in sentiment was enough to push the barometer to a new all-time high. The Index of Current Conditions jumped 12 points to 154 and the Index of Future Expectations fell slightly to 175.
The monthly survey of 400 US farmers was conducted February 10-14.
Audio: Jim Mintert, Purdue Center for Commercial Agriculture