US farmer sentiment collapses, index finds

US agricultural producers' sentiment in May deteriorated to its most negative since October 2016, according to the Purdue/CME Group Ag Economy Barometer May results.

(Photo: VCG)

The Purdue University/CME Group Ag Economy Barometer is a measure of the US agricultural economy's health, based upon a nationwide mid-month survey of 400 US agricultural producers, providing a perspective for understanding the US agriculture industry and global economy.

The May barometer reading of 101 dropped again, 14 points lower than a month earlier, and it was the lowest barometer reading since October 2016. For the second month in a row, the collapse in farmer sentiment was attributable to big declines in both the Index of Current Conditions and the Index of Future Expectations, indicating farmers' weakening perceptions of both current economic conditions and expectations for the future.

(Photo: Purdue/CME Group Ag Economy Barometer)

The Ag Economy Barometer May results also show that farmers were very reluctant to make major investments in their farming operations, for farmers were less optimistic about future farmland values than they were in early 2019 from both a short-run and longer-run perspective.

(Photo: Purdue/CME Group Ag Economy Barometer)

Farmer sentiment collapse was partly driven by the factor that agricultural producers remain unnerved over uncertainty about the US and its growing use of tariffs in international trade disputes. China is one of the most important agricultural markets for the US. But due to the trade friction between China and the US, the export of agricultural products from the US to China has dropped sharply.

The American Soybean Association (ASA) this May issued a statement urging the US government to hold off hiking tariffs. "The sentiment out in farm country is getting grimmer by the day," said John Heisdorffer, the chairman of the ASA, according to the Guardian. "Our patience is waning, our finances are suffering and the stress from months of living with the consequences of these tariffs is mounting."