Farmer Sentiment Falls For Second Straight Month

For the second straight month, agricultural producer sentiment experienced a big decline as the Purdue University Ag Economy Barometer fell 14 points in May to a reading of 101.

Purdue University Agricultural Economists James Mintert and Michael Langemeier said in a report to the CME Group that the sentiment decline again was the lowest since October 2016.  It was driven by producers’ weakening perceptions of current economic conditions and expectations for the future.

“Overall, producer sentiment was the most negative we have observed since October 2016,” they said.  The Large Farm Investment Index fell to its lowest level since data collection began in fall 2015, indicating farmers were very reluctant to make major investments in their farming operations.

Such sentiment could have major implications for firms like John Deere, which manufactures farm equipment, a market analyst said.

For the second straight month, the decline in farmer sentiment was attributable to big declines in the Index of Current Conditions, which fell to 84 in May from 99 in April, and the Index of Future Expectations, which fell to 108 from 123 during the same period.

The latest barometer decline and in its two sub-indices effectively erased all of the large improvement in farmer sentiment that took place after the November 2016 election.

Farmers’ expectations for short-run (12 months ahead) and longer-run (five years ahead) changes in farmland values also weakened, especially when compared with their perspectives earlier this year, Mintert and Langemeier said.

Finally, producers’ confidence that the trade dispute with China will be resolved quickly was waning and they also were less confident the trade dispute would ultimately be resolved in a way that favors US agriculture than they were earlier in the year.




The Large Farm Investment Index collapsed to a reading of 37 in May, 11 points lower than in April when it was 23 points below a year earlier, Mintert and Langemeier reported.  This index has ebbed and flowed over the last year, but it has trended lower since the start of this year when the index stood at 62.

Since the beginning of 2019, the percentage of farmers that expected farmland values to decline over the year has been increasing, rising from 21% in January to 25% in March and 30% in May, the economists said.

Sentiment regarding the longer-run movement in farmland values also waned, especially since March, they said.  In May, just 39% of producers said they expected farmland values to rise over the next five years, compared with 48% in the March survey.

Producers exhibited a noticeably more negative view of farmers’ futures equity positions in May than the last time the question was posed in February.  In May, 55% told us they expected farmers’ equity to decline over the next year, up from 39% in February and 35% a year earlier.

Uncertainty over trade disputes was a recurring theme in farmers’ concerns.




Cash cattle trading was reported in the Plains this week at $112 to $115 per cwt on a live basis, down $3 from last week.  No dressed-basis trade was reported but took place last week at $186 per cwt, steady to up $1.

The USDA choice cutout Tuesday was down $0.20 per cwt at $223.00, while select was up $0.34 at $207.21.  The choice/select spread narrowed to $15.79 from $16.33 with 107 loads of fabricated product sold into the spot market.

The CME Feeder Cattle index for the seven days ended Monday was $131.95 per cwt, down $1.10 from the previous day.  This compares with Tuesday’s Aug contract settlement of $137.45, up $3.95.