The Ag Economy Barometer dropped again in May. The barometer reading of 101 was 14 points lower than a month earlier and was the lowest barometer reading since October 2016. For the second month in a row, the decline in farmer sentiment was attributable to big declines in both the Index of Current Conditions, which fell from 99 in April to 84 in May and the Index of Future Expectations, which fell from 123 in April to 108 in May.
A rating below 100 is negative, while a rating above 100 indicates positive sentiment regarding the agriculture industry. This month’s declines in the barometer and its two sub-indices effectively erased all of the large improvement in farmer sentiment that took place following the November 2016 election. And, producers’ confidence that the trade dispute with China will be resolved quickly is dissipating as farmers were also less confident that the trade dispute would ultimately be resolved in a way that favors U.S. agriculture than they were earlier in the year.