August Ag Economy Barometer Falls

Farmer concern regarding low prices and the farm economy led to a sharp drop in the August Ag Economy Barometer. The Perdue/CME Group economic measure fell 29 points last month to a reading of 124. The barometer’s decline was attributed to declines in both the Index of Current Conditions, which dropped 19 points, and the Index of Future Expectations, which fell 34 points below its July reading. A reading greater than 100 still indicates positive sentiment, while a reading below indicated negative sentiment. Weaker views were fueled in part by both crop and livestock price declines that took place during late July and early August. Meanwhile, producers’ concerns about the future of the farm economy led to a more negative outlook on the advisability of making capital investments and on the short-term farmland value outlook. Meanwhile, farmers in August were slightly more optimistic the trade dispute with China will be resolved soon, although many still think resolution of the dispute will not come quickly.