More Producers Expecting Tougher Times in Next Five Years
LAFAYETTE, IN – Last year ended up being a banner year for many in agriculture based on higher grain and oilseed prices and record-high government payments. Yet, according to the latest data from the Purdue University/CME Group Ag Economy Barometer, producers’ expectations for good versus bad times in U.S. agriculture have undergone a marked shift over the last several months.
For example, in May just 27 percent of respondents said they expect good times during the next five years, the lowest reading in the survey’s history and down 12 points from a month earlier. One driver of this shift according to Dr. Jim Mintert, director of the Center for Agriculture Competitiveness, appears to be the discrepancy between expectations for the crops versus livestock sectors in the upcoming five years.
This month over half (54 percent) of respondents said they expect widespread good times for the crops sector in the next five years whereas just one-fourth (26 percent) expect anything similar for the livestock sector.
The difference in expectations for these two principal sectors of the agricultural economy could help explain why producers appear to be very bullish about farmland values and cash rental rates while at the same time expressing less optimism about both current conditions and future expectations for the agricultural economy overall.
(SOURCE: All Ag News)