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FARMER SENTIMENT REBOUNDS AS COMMODITY PRICES RALLY AND AGRICULTURE TRADE PROSPECTS IMPROVE
Sep. 2, 2020
Source: Purdue University news release
To view the complete report, click here.
Farmer sentiment improved markedly in August as the Purdue University-CME Group Ag Economy Barometer rose to a reading of 144, 26 points higher than a month earlier. The improvement in producer sentiment was the result of improved perceptions regarding current conditions and, especially, better expectations for the future.
The Index of Current Conditions rose 13 points in August to a reading of 124 while the Index of Future Expectations rose 33 points to a reading of 154. The Ag Economy Barometer is calculated each month from 400 U.S. agricultural producers' responses to a telephone survey. This month's survey was conducted from August 17-21, 2020.
The barometer and its two sub-indices all posted their most positive readings since February 2020 when record highs were established and before the pandemic began.
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| Figure 1. Purdue/CME Group Ag Economy Barometer, October 2015-August 2020. |
The improvement in farmer sentiment this month was underpinned by expectations for excellent crop yields, as indicated in USDA's August Crop Production report, and nearly across the board rallies in key ag commodity prices that took place in August. For example, compared to lows established in early August corn, soybean, wheat, cattle and hog prices all rallied during August.
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| Figure 2. Indices of Current Conditions and Future Expectations, October 2015-August 2020. |
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