August 07, 2018

08/08/2018: Record decline in the ag barometer as trade war concerns and low commodity prices weaken producer outlook

The Purdue University/CME Group Ag Economy Barometer declined 26 points, down to 117, in July making it the largest one-month decline in producer sentiment since data collection began in October 2015. The drop in sentiment was fuelled by increasing trade war concerns and decreasing commodity prices.

The Purdue/CME Group Ag Economy Barometer records largest one-month decline in July since data collection began in 2015. (Purdue/CME Group Ag Economy Barometer/James Mintert)
Image credit: Purdue University

"This summer we've seen tariffs placed on imports of U.S. ag products by China and Mexico that are impacting producers" bottom line," said James Mintert, the barometer's principal investigator and director of Purdue University's Centre for Commercial Agriculture. "This month, we asked producers whether they expect to see their net income decline as a result of trade war conflicts. Over two-thirds of respondents indicated they expect to see lower income because of trade conflicts with over 70 percent of them expecting a net income decline of 10 percent or more."

Sharp declines were also recorded for the Index of Current Conditions, which fell from 138 to 99, and the Index of Future Expectations, which fell from 146 to 126 in July. The Ag Economy barometer is based on a monthly survey of 400 agricultural producers from across the country.

Read the full article on the Milling and Grain website, HERE.

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