Farmer sentiment was virtually unchanged in July in comparison to a month earlier, according to the Purdue University/CME Group Ag Economy Barometer, said a university release.
The index rose just one point from June to a reading of 118, still 30% lower than in February before the pandemic began affecting the agricultural economy, the survey said. The Ag Economy Barometer is based on responses from 400 US agricultural producers with this month’s survey conducted from July 20-24.
CURRENT, FUTURE ECONOMIC CONDITIONS PERSPECTIVES CHANGE
Although there was little change in the overall July barometer, producers’ perspective on current versus future conditions shifted, the release said. The Index of Current Conditions rose 12 points from June to a reading of 111, and the Index of Future Expectations fell five points from June to a reading of 121.
Unchanged from June but nine points lower than in May, 56% of producers reported they planned to reduce their farm machinery purchases compared with a year ago, the university said. Thirty-eight percent of producers reported they planned to keep machinery purchases about the same as last year, which was also unchanged from June but seven points higher than in May.
The Farm Capital Investment Index also was unchanged from June standing at a reading of 60, noticeably stronger than May’s index reading of 50.
Although overall farmer sentiment in July did not change much compared to June, sentiment was still much weaker than in February before the coronavirus hit, the release said. In July, farmers indicated they were a bit less concerned about the current economic situation on their farms than earlier this spring, but they were less optimistic about the future, perhaps as a result of the recent resurgence in COVID-19 cases.
Two-thirds of producers responding to this month’s survey said they believed Congress should provide additional economic assistance to farmers in 2020 to help offset the pandemic’s impact on agriculture, the university said.
COVID-19 CONCERNS
More than half of farmers responding to the July survey said they were less likely to attend in-person educational events in 2020 as a result of COVID-19 concerns, the release said. When asked what their top information source would be in lieu of attending in-person events, 36% chose farm magazines, 19% chose online webinars, 17% chose farm radio and 17% chose websites.
Direct emails and podcasts were far less popular as a top information source with just 8% and 3% of producers choosing these options, respectively, the release said.
When asked about their short-term outlook for land values, farmers’ perspective improved with 16% saying they expected farmland values to rise over the next 12 months compared with 10% in June, the university said.
However, when asked about farmland in five years, farmers were somewhat less optimistic than they were in June, with 48% saying they expected values to rise over the next five years compared with 55% in the previous survey.
The percentage of farmers worried about the coronavirus affecting their profitability has been declining since March.
CATTLE, BEEF RECAP
Fed cattle trading was reported Tuesday at $99 to $102 per cwt on a live basis, up $2 to $4.50 from last week. Dressed-basis trading was seen last week at $160 per cwt, up $2 from the previous week.
The USDA choice cutout Tuesday was down $0.42 per cwt at $204.24, while select was up $0.05 at $190.45. The choice/select spread narrowed to $13.79 from $14.26 with 109 loads of fabricated product sold into the spot market.
The CME Feeder Cattle index for the seven days ended Monday was $140.50 per cwt, up $0.70. This compares with Tuesday’s Aug contract settlement of $144.70, down $0.17.