Purdue University’s Ag Economy Barometer rebounded in August to a reading of 129 after falling to 117 in July, but remained well below the readings of 141 in May and 143 in June, said a report on the Barometer Tuesday.
The sentiment shift primarily was attributed to producers’ improved perceptions of current conditions, the report said. The Index of Current Conditions improved to a reading of 121 following a dip to 99 in July. The Index of Future Expectations also rose in August, but the increase was modes, rising just six points from July to 132.
Producers also were less pessimistic about the direction of the US agricultural economy in the year ahead in August than they were in July. This seemed to spill over into a somewhat more optimistic view about making large farm investments.
Producers said they were still concerned that trade conflicts would lower their farm income, but scaled back their perception regarding the magnitude of the expected income reduction compared with responses received in July, the report said.
Producers’ opinions were split evenly regarding whether the Administration’s $12 billion relief plan will relieve their concerns about the effect of tariffs on their farm’s income. Nearly half of respondents (47%) said the relief plan would either completely (4%) or somewhat (43%) relieve their concern.
However, 47% of respondents said “not at all” in response to that question, the report said.
MORE WILLING TO INVEST
In August, 22% of respondents said they expected good times in agriculture in the year ahead, up modestly from 19% in July, the report said. The bigger change from July was among those expecting bad times in US agriculture, which declined to 52% in August from 61% in July.
Producers’ shifting perspective on the US agricultural economy also was evident in their response to a question about making large investments in their farming operation, the report said. In August 26% said now is a good time to make large investments, up from 20% in July and unchanged from their response to this question in June.
Correspondingly, the percentage of producers that felt now is a bad time to make large investments fell by eight points in August to 65%, compared with 73% in July, the report said.
LITTLE IMPROVEMENT IN FARM PRICE OUTLOOK
After jumping 10 points in July, the percentage of producers expecting lower farmland values in the coming year improved slightly to 29%, compared with 31% a month earlier, the report said. At the same time, the percentage of producers expecting higher farmland prices declined to 14% from 15%.
When asked for their perspective about farmland values five years from now, the percentage of producers expecting higher prices declined to 42% in August from 47% in July.
However, the percentage of respondents expecting lower prices also declined, falling three points to 14%.
CATTLE, BEEF RECAP
No fed cattle sold last Wednesday on the Livestock Exchange Video Auction, compared with 280 that traded the previous Wednesday at $109.50 per cwt.
Cash cattle traded last week at mostly $107 to $108 per cwt on a live basis, down $1.50 to $2 from the previous week, and at $168 to $170 on a dressed basis, down $2 to $4.
The USDA choice cutout Tuesday was up $1.13 per cwt at $210.82, while select was up $0.94 at $202.21. The choice/select spread widened to $8.61 from $8.42 with 102 loads of fabricated product sold into the spot market.
The CME Feeder Cattle index for the seven days ended Monday, was $155.19 per cwt, up $1.21. This compares with Tuesday’s Sep settlement of $151.72, up $2.27.