Ag producers are more optimistic about the future of the ag economy after a crop price rally, a Market Facilitation Program announcement and passage of a disaster aid bill boosted producer sentiment in June.
The Purdue University/CME Group Ag Economy Barometer, which surveys some 400 agricultural producers across the country, jumped 25 points from May to a reading of 126. However, this number is still lower than last year’s reading of 143.
Both the Index of Current Conditions and Index of Future Expectations saw increases of 13 points and 33 points, respectively. The ICC increased to 97 while the IFE increased to a reading of 141.
Even though producer sentiment increased in June, it is still a challenging economic environment for farmers, as they struggled to plant a crop or took prevented planting options this year. Nearly 51% said they intend to take prevented planting on more than 15% of their intended corn acres, and 32% of corn and soybean farmers said they plan to take prevented planting payments on less than 15% of their corn acres.
Some 10% of corn and soybean producers said the MFP announcement did affect their prevented planting decisions. Of the 10%, one in five farmers said they intended to plant more corn, and one in 10 said they intended to plant more soybeans because of the announcement.
The Department of Agriculture announced a second MFP program in May to assist farmers hit by more Chinese retaliatory tariffs. The number of producers who expected a beneficial outcome from the U.S.-China trade dispute declined from 77% to 65% from March through May. But the number rose to 69% in the June survey. About 32% of producers expected the two countries to reach a deal by early September.
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