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The Purdue/CME Group Ag Economy Barometer says ​​​​​​​international agricultural trade issues continue to cause concern.

January 8, 2019

2 Min Read
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The Purdue/CME Group Ag Economy Barometer December report has been released.There was a modest drop in agricultural producer sentiment in December as farmers' perception of both current and future economic conditions weakened. The December barometer reading of 127 was 7 points lower than November.

Both of the barometer's two sub-indices declined in December: the Index of Current Conditions fell 6 points to 109, and the Index of Future Expectations fell 8 points to 135. When comparing these readings to December 2017, the Index of Current Conditions is substantially lower, registering a decline of 30 points, while the Index of Future Expectations actually improved from year-to-year with an uptick of 15 points. This mixed perspective appears to be encouraging farmers to be cautious about making large investments in their farming operations. In December 2018 the Large Farm Investment Index, which measures whether producers feel this is a good time to make large farm investments, fell 5 points to a reading of 51. This marked a 29-point drop from one year ago when it reached a reading of 70.

Those same concerns were also apparent when producers were asked whether now is a "good time" or "not a good time" to bring a new generation of family into the business. Just 42 percent said now was a "good time" compared to approximately half during the previous two years. However, when looking ahead 5 years, 65 percent of producers expect conditions to be more favorable to on-boarding a new generation.

International agricultural trade issues continue to cause concern and could be causing producers' reduced confidence in current economic conditions. When producers were asked whether they expect exports to increase or decrease in the next five years, 59 percent indicated that they expect ag exports to increase, down 7 points from November's survey response, whereas 26 percent expect ag exports to decrease, up from 10 percent on the November survey.

Source: Purdue/CME Group Ag Economy Barometer, which is solely responsible for the information provided and is wholly owned by the source. Informa Business Media and all its subsidiaries are not responsible for any of the content contained in this information asset.

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