Perhaps it’s tariffs, low prices or the government shutdown, but the agriculture business is hitting a rough patch, according to a producer survey. Will a new trade deal with China turn things around?
Right now, farmers aren’t happy, and they don’t see exports growing in the next five years, according to the just-released December Purdue University/CME Group Ag Economy Barometer. The survey of 400 agricultural producers across the country show a deepening malaise taking hold of the sector. Agriculture added roughly $1 trillion to the U.S. GDP in 2016.
Producer sentiment dropped to 127, seven points off November levels, seen as a modest drop.
However, other indicators show disturbing trends. For one, the Index of Current Conditions fell six points, which puts the index substantially lower than a year ago and indicates a weakening condition.
“Over the course of the last year, producers’ impression of current economic conditions on their farms had declined markedly,” said James Mintert, the barometer’s principal investigator and director of Purdue University’s Center for Commercial Agriculture, in a statement. He added that expectations for the future have held steady. “As a result of this mixed view, farmers appear to be cautious about making large investments in their farming operations.”
Although the survey was done prior to the signing of the 2018 farm bill, certain responses indicated a downturn in the sector. For example, although 59% of respondents noted that they expect agricultural exports to increase over the next five years, that number is down seven points from November.