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Source: Purdue University news release

To view the complete report, click here.

For the second month in a row the Purdue University-CME Group Ag Economy Barometer dropped sharply, falling 25 points in April to a reading of 96. This marks the first time the barometer has fallen below 100 since October 2016, effectively wiping out all of the improvement in farmer sentiment that took place following the 2016 election.

April's decline leaves the Ag Economy Barometer 72 points below its record high, which was just established in February of this year. The Ag Economy Barometer is generated each month from 400 U.S. agricultural producers' responses to a telephone survey. This month's survey was conducted from April 19-24, 2020.

Figure 1. Purdue/CME Group Ag Economy Barometer, October 2015-April 2020.

Declines in both the Index of Current Conditions and the Index of Future Expectations drove the barometer lower this month with the largest decline occurring in producers' perceptions about their current situation. The Index of Current Conditions declined 39 points in April, to a reading of 72, while the Index of Future Expectations fell 18 points to a reading of 108. April's decline pushed the Current Conditions Index 53 percent below its all-time high set back in February. Over the same two-month period the Future Expectations Index fell 39 percent.

Figure 2. Indices of Current Conditions and Future Expectations, October 2015-April 2020.

Farmers indicated that, in the current environment, they are reluctant to make large capital investments in their farming operations. The Farm Capital Investment Index fell 16 points in April to a reading of 38, which was 34 points below its most recent high set in February of this year. April's investment index stood at a level nearly equal to last year's low of 37, set in May, when farmers were suffering from a combination of severe spring planting delays and low commodity prices.

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