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Producer sentiment falls as trade uncertainty continues

An ag economist says producers are less optimistic about the ag economy because of uncertainty surrounding trade and the impact on US ag exports.

David Widmar says although the Purdue University/CME Group Ag Economy Barometer fell to 135, sentiment is not as low as it could be because farmers were surveyed before China announced retaliatory tariffs on US ag products.

“We asked producers how likely they thought a trade war impacting U.S. agriculture was in that it resulted in a significant decrease in agricultural exports,” he says. “Almost half  of producers, 47 percent, told us something along those lines was likely.”

He tells Brownfield farmers were also asked about the likelihood of a U.S. withdrawal from the North American Free Trade Agreement.

“A majority of producers, 36 percent, gave it a neutral rating so they are uncertain or have mixed thoughts about how likely a withdrawal is,” he says. “About 34 percent said it was likely.”

Widmar says although farmers are expressing concern, there hasn’t been a huge drop in sentiment yet and the next survey should be telling.

The index of Current Conditions fell 9 points to 134 and the Index of Future Expectations dropped 4 points to 135.

The ag economy barometer, monthly survey of 400 U.S. ag producers, climbed to 140 in February. A rating below 100 is negative, while a rating above 100 indicates positive feelings about the ag economy.

Audio: David Widmar, Purdue University