The bulk of the U.S. corn and soybean harvests still lie ahead, but generally improving conditions from a difficult spring planting season have American farmers less pessimistic about crop production profitability.
According to the September update of the monthly Purdue University/CME Group Ag Economy Barometer – which is based on a survey of 400 producers across the U.S. - just one out of five respondents (21%) said they expected crop production profitability to decline over the next year, a major improvement from previous months.
When the same question about crop production profitability was posed in May - at a time when concerns about delayed planting were rising and crop prices were low - farmers had an extremely negative outlook with 41% of respondents expecting profitability to decline over the next year. When the question was asked again in August, producers’ perspective was starting to shift, although just over one-third (34%) of respondents still said they expected profitability to decline.
“As crop growing conditions improved this season, producers’ short-run perspective on profitability of crop production changed significantly,” the barometer said, “. . .this could be a signal that growers expect better times in 2020 compared to 2019, possibly because they are looking forward to a return to more normal growing conditions and crop production in 2020.”
The overall Ag Economy Barometer dipped slightly in September to a reading of 121, down just 3 points from August, when the index stood at 124. Although the barometer’s decline was small, there was a relatively large sentiment shift among ag producers as they were noticeably more pessimistic about current conditions on their farms and in the U.S. ag economy, but somewhat more optimistic about future economic conditions, both compared to one month earlier.
The full Ag Economy Barometer can be found here:
Source: DePutter Publishing Ltd.
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