Producers said their farm operations? financial positions are stronger than at this time last year, but some said they may not meet their financial targets. The Purdue University/CME Group Ag Economy Barometer was released Wednesday morning.
It read 131 for the month of June ? virtually unchanged from the April and May readings of 130.
“Although the Ag Economy Barometer has not changed appreciably the last couple of months, it’s important to note that it remains well above levels recorded prior to November 2016,” Jim Mintert, said the barometer’s principal investigator and director of Purdue University’s Center for Commercial Agriculture.
In June 2017, 13 percent of survey respondents indicated their operations were financially better off than a year before. This is the highest reading since Purdue researchers first started surveying producers in October 2015.
“Several factors likely contributed to the long-term shift in producers’ attitudes about their operations’ financial conditions, Mintert said. “Revenues on many farms increased as a result of record – or near record – crop yields in 2016. Also, corn and soybean futures prices strengthened from late summer through early winter while production costs, especially fertilizer, moderated when compared to last year. Farmland rental rates also continue to soften as part of the farm economy’s long-term adjustment to tight crop operating margins.
Only 3 percent of producers expressed that same positive sentiment a year earlier. However, farmers’ positive sentiment regarding their operations’ financial conditions improved steadily during the last half of 2016, before weakening somewhat this past winter. In the last three months, producers became more optimistic about their farms’ financial positions, with 13 percent of surveyed producers indicating in June that their farms were financially better off than a year earlier.
“All of this contributed to improved current financial conditions for many farm operations. Our survey data suggests that for some farm operators, financial conditions have bottomed out.”
While the barometer survey indicated the current financial situation for many farm operations had stabilized, 28 percent of producers said they expect their farms’ 2017 financial performance to be worse than they had projected earlier in the year. That concern could be connected to adverse planting and growing conditions in the Eastern Corn Belt this spring, as well as recent declines in corn and soybean prices.
The barometer is based on a survey of 400 U.S. agricultural producers across the country.
Read the full June Ag Economy Barometer report.
