Producer Sentiment Improves As Trade Victories Appear Close

WEST LAFAYETTE, IN – The Purdue University/CME Group Ag Economy Barometer improved 15 points to a reading of 136 in October. The barometer is based on a mid-month survey of 400 U.S. crop and livestock producers. There are a couple of trade deals with major trading partners in the hopper that have major implications for U.S. agriculture. As a result, questions were added to this month’s barometer survey to gauge whether farmers feel these agreements are important to the U.S. agricultural economy. The U.S.-Mexico-Canada Trade Agreement (USMCA) is still waiting on Congressional approval. When asked whether they felt the trade deal was important to the U.S. agricultural economy, 96 percent of producers indicated it was either important or very important. However, only 55 percent expect it to be approved by Congress soon. At the same time, 97 percent of producers felt a recently announced trade deal with Japan was also important or very important to U.S. agriculture. Dr. Jim Mintert is Director of the Center for Commercial Agriculture at Purdue and explains that “since last spring, we have been tracing producers’ perceptions regarding the soybean trade dispute between the U.S. and China–specifically, whether they think the dispute will be resolved soon and the outcome will ultimately benefit U.S. agriculture”. In October, 51 percent of respondents said that an imminent resolution was unlikely, which is down from a reading of 59 percent in September and 71 percent in August. At the same time, 75 percent of farmers in the October survey said they expect the final outcome will ultimately prove beneficial to U.S. agriculture. October marked the fourth month in a row that over 70 percent of producers said they expected a beneficial outcome to the trade dispute.