A new Farm Bill finally emerged from Congress this week, but in November, farmers expressed concern about the lack of new legislation.
Minnesota Public Radio reporters Dan Gunderson and Elizabeth Dunbar quoted Minnesota Democratic Representative Collin Peterson saying Monday that the new bill looks a lot like the one that expired in September.
Congress could vote on it in a few weeks.
FARMERS NERVOUS BUT OPTIMISTIC
The Purdue University/CME Group Ag Economy Barometer’s November reading was 134, a decline of a little more than 1% from the October survey when the barometer reading was 136. This leaves the barometer of farmer attitudes about a variety of issues affecting agriculture 6% below its most recent peak of 142 reached in June before the effect of trade disruptions were felt throughout much of US agriculture.
However, November’s reading of ag sentiment was below the spring peak of 152 and was still six points higher than a year earlier when the index of producer sentiment was 128.
The modest decline in the November barometer reading occurred because producers’ view of future conditions weakened slightly as the Index of Future Expectations was 143 compared with 146 in October, a report on the index said. Still, the index was well above its September reading and close to its spring peak, indicating producers had a relatively optimistic view of the future.
As a result, producers took a somewhat more favorable view of making large investments in their farming operation and were more positive about future farmland values, especially when looking ahead five years, the report said.
However, there remains an undercurrent of concern about the farm economy from producers as only 13% expected farm profitability to increase in 2019 and only 8% expected farmers’ equity position to improve in the next 12 months.
LOOKING AHEAD
Farmers overwhelmingly expected to face higher interest rates in the next 12 months and over the next five years, the survey said. However, their view regarding the advisability of making large investments has improved since September, moving up to 52 in October and up to 56 in November.
Yet the percentage of producers expecting profitability to improve has changed little in recent monthly surveys, the report said. Only 33% said they expected 2019 profitability to improve.
Thirty percent of soybean growers said they planned to reduce acreage in 2019, up from 19% a month earlier, the report said. These growers said they planned to reduce soybean acreage significantly, with 69% of them saying they would reduce their acreage by more than 10%.
Finally, producers expressed concern about Congress’ failure to pass a new Farm Bill to replace the expired 2014 Farm Bill. Three-fourths of farmers surveyed were either somewhat or very concerned about the lack of a new Farm Bill with 33% indicating they were very concerned.
CATTLE, BEEF RECAP
At the Fed Cattle Exchange video auction last Wednesday, 148 head of fed cattle sold at $116.75 per cwt.
Cash cattle traded last week late at mostly $118 up to $118.50 per cwt on a live basis, up $1 to $2 from the bulk of the previous week’s action. On a dressed basis, cattle traded at mostly $183 up to $183.50 per cwt, up $3 to $3.50.
The USDA choice cutout Tuesday was up $0.78 per cwt at $213.86, while select was down $1.67 at $197.51. The choice/select spread widened to $16.35 from $13.90 with 130 loads of fabricated product sold into the spot market.
The CME Feeder Cattle index for the seven days ended Monday, was $146.72 per cwt, down $1.13. This compares with Tuesday’s Jan settlement of $144.40, down $0.10.