Prices, Weather and Trade Undercut Outlook for Farmers

(WEST LAFAYETTE, IN) Ag producer sentiment in May dropped to its lowest level since October 2016, erasing all improvements recorded following the November 2016 election. The Purdue University/CME Group Ag Economy Barometer, based on a mid-month survey of 400 agricultural producers across the U.S., declined 14 points in May to a reading of 101, down from 115 in April. The decline in the barometer came about because producers’ perspectives on both current and future economic conditions worsened considerably compared to a month earlier. The Large Farm Investment Index, which measures producers’ attitudes toward making large investments in their farming operation, has ebbed and flowed over the past year; however, since the beginning of 2019, the index has trended significantly lower. In May, just 18% of farmers stated it was a “good time” to make large farm investments while 81% stated it was a “bad time,” pushing the investment index down to a reading of 37. This is the lowest Large Farm Investment Index reading since the Ag Economy Barometer’s October 2015 inception.