WEST LAFAYETTE, Ind. and
CHICAGO, Aug. 6, 2019 /PRNewswire/ -- The Purdue University/CME Group Ag Economy Barometer
reading jumped to 153 in July, up 27 points from June, and up 52
points from May. Improving crop conditions after an extraordinarily
wet planting season, combined with a late spring/early summer crop
price rally, boosted farmer sentiment. This improvement occurred
despite the fact that many producers were in the midst of filing
prevented planting crop insurance claims and wondering about the
size of the USDA's 2019 Market Facilitation Payments (MFP). Results
are based on a survey of 400 agricultural producers across the U.S.
conducted from July 15 through July 19,
2019, which was prior to USDA's announcement of 2019 MFP
payment rates.
A big driver of sentiment was producers' improved expectations
for current economic conditions. The Index of Current Conditions, a
sub-index of the ag barometer, increased 44 points in July to a
reading of 141, marking the largest one month improvement since
data collection began in October of 2015. The barometer's other
sub-index, the Index of Future Expectations, also increased, up 18
points from June, to a reading of 159 in July.
"The Corn Belt is continuing to see better crop conditions and
that has farmers, at least momentarily, breathing a sigh of relief.
However, the agricultural economy is still in flux," said
James Mintert, the barometer's
principal investigator and director of Purdue
University's Center for Commercial Agriculture. "The impact
of prevented planting on 2019 corn and soybean acreage and prices
along with the outcome of trade talks with China remain unknown."
As a result of the late planting season, and the possibility of
large prevented planting acreage not captured in their June
Acreage report, USDA announced that they would re-survey
farm operations in nearly all major corn and soybean states during
July to better estimate actual planted acreage of both crops. The
results from that survey will not be available until
mid-August.
To help fill the information void, this month's barometer survey
asked corn and soybean growers if they are taking a prevented
planting payment on any of the corn or soybean acreage they
intended to plant in 2019. Although USDA extended their deadline to
report prevented plantings to July 22
in affected states, most farmers completed their prevented planting
claims by USDA's original deadline of July
15 and were able to provide an accurate reading on their
prevented planting acreage when this month's ag barometer survey
was conducted.
Twenty-five percent of corn/soybean growers in the survey said
they are filing a prevented planting claim on some of their
intended corn acreage while 24 percent said they are filing a
prevented planting claim on some of their soybean acreage. In a
follow-up question, producers who indicated they submitted a claim
were asked what percentage of their intended acreage they will
claim as prevented planting. Sixty-one percent of the farmers
filing a prevented corn planting claim said their prevented
planting totaled 15 percent or more of their intended corn acreage
and 42 percent said that they did not plant 25 percent or more of
their intended acreage. Meanwhile, 39 percent of soybean growers
submitting a prevented planting claim said they did not plant
between 15 and 25 percent of their intended soybean acreage. In
contrast to corn growers, however, just 2 percent of soybean
farmers with a prevented planting claim said they were not able to
plant 25 percent or more of their intended soybean acreage.
Producers were also asked whether they feel now is a good or bad
time to make large investments in their farming operations. In
July, the Large Farm Investment Index, improved to a reading of 67,
up 25 points from June and 30 points from May. This increase marked
both the largest 2-month improvement in the index since data
collection began in fall 2015 and the highest reading for the index
since February 2018. Sentiment also
spilled over into their expectations for increased land values.
Short-term, the percentage of producers expecting land values to
increase in the upcoming 12 months jumped from just 10 percent in
June to 21 percent in July, the highest percentage expecting an
increase in values since February
2018. Long-run, 53 percent of producers said they expect
values to rise over the next 5 years compared to 45 percent who
felt that way in June and 39 percent in May.
Read the full July Ag Economy Barometer report at
https://purdue.ag/agbarometer. This month's report includes
insights into whether producers expect a swift and favorable
resolution to the ongoing trade dispute with China. The site also offers additional
resources – such as past reports, charts and survey methodology –
and a form to sign up for monthly barometer email updates and
webinars. Each month, Dr. Mintert also provides a short video
analysis of the barometer results, available at
https://purdue.ag/barometervideo.
The Ag Economy Barometer, Index of Current Conditions and Index
of Future Expectations are available on the Bloomberg Terminal
under the following ticker symbols: AGECBARO, AGECCURC and
AGECFTEX.
About the Purdue University
Center for Commercial Agriculture
The Center for Commercial Agriculture was founded in 2011 to
provide professional development and educational programs for
farmers. Housed within Purdue
University's Department of Agricultural Economics, the
center's faculty and staff develop and execute research and
educational programs that address the different needs of managing
in today's business environment.
About CME Group
As the world's leading and most diverse derivatives marketplace,
CME Group (www.cmegroup.com) enables clients to trade futures,
options, cash and OTC markets, optimize portfolios, and analyze
data – empowering market participants worldwide to efficiently
manage risk and capture opportunities. CME Group exchanges offer
the widest range of global benchmark products across all major
asset classes based on interest rates, equity
indexes, foreign exchange, energy, agricultural
products and metals. The company offers futures and
options on futures trading through the CME Globex® platform, fixed
income trading via BrokerTec and foreign exchange trading on the
EBS platform. In addition, it operates one of the world's leading
central counterparty clearing providers, CME Clearing. With a range
of pre- and post-trade products and services underpinning the
entire lifecycle of a trade, CME Group also offers optimization and
reconciliation services through TriOptima, and trade processing
services through Traiana.
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Writer: Kami Goodwin,
765-494-6999, kami@purdue.edu
Source: Jim Mintert,
765-494-7004, jmintert@purdue.edu
Related website:
Purdue
University Center for Commercial Agriculture:
http://purdue.edu/commercialag
CME Group: http://www.cmegroup.com/
Photo Caption: Confidence in the ag economy soars;
producers confirm large prevented plantings of corn and soybeans.
(Purdue/CME Group Ag Economy
Barometer/James Mintert)
A publication-quality photo is available at
https://news.uns.purdue.edu/images/2019/july-barometer.jpg
CME-G
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SOURCE CME Group