Producer Sentiment Climbs in June With USDA Announcement

(WEST LAFAYETTE, IN) Ag producer sentiment rebounded in June as farmers’ expressed a more optimistic outlook toward the future of the ag economy. The Purdue University/CME Group Ag Economy Barometer, based on a mid-month survey of 400 agricultural producers across the U.S., increased to a reading of 126 in June, up 25 points from May. Increases were also seen in both of the barometer’s sub-indices. While the Index of Current Conditions only saw a modest increase, up 13 points from May, to a reading of 97, the Index of Future Expectations jumped 33 points, to a reading of 141 in June. With the prospect of large prevented plantings and concerns that delayed planting of corn and soybeans would impact yields, USDA forecast tighter supplies than previously expected. Supply concerns were a key factor behind a rally in corn and soybean prices that took place from mid-May to mid-June when the June barometer survey was conducted. USDA also announced it would provide another round of Market Facilitation Program (MFP) payments on planted acres of a large number of covered crops, including corn and soybeans. In light of the announcement and the historic corn and soybean planting delays this spring, producers who planted corn or soybeans last year were asked whether the announcement affected their decision to take or not take a prevented planting payment this year. Ten percent said the announcement did impact their prevented planting decision making and one in five farmers within that group said they intended to plant more corn, while one in ten intended to plant more soybeans, because of the MFP program.