Did You know the farm economy continues to demonstrate negative tendencies?

By Howard Halderman

10 /08 /18

 The farm economy continues to demonstrate negative tendencies.  Earlier this week Purdue released the Ag Barometer results for September.  The Ag Barometer is a survey of 400 producers from around the US as to how they feel about the current ag economy as well as their outlook on the future.  Purdue does this in conjunction with the CME.  The September results were a score of 114.

What does this mean?  The scale is 0-200 so in theory if you feel average about the ag economy the score would be 100 and therefore a 114 is above average.  Having watched this survey since its inception in 2015 this is the lowest level in nearly two years.  All of last year and for 7 months of 2018 the results were well over 120 and some over 130.  Producers are reacting negatively to low commodity prices and a lot of uncertainty.

Due to the large US yields for corn and soybeans (which is a positive) and the trade wars prices for those commodities are very low, well below breakeven at the present time.  The bigger factor is the level of unknowns in this market.  What we do know . . . interest rates are rising, commodity prices are falling and input costs are moving higher due to the stronger general economy are bearish factors.  The unknowns related to the trade war with China and its resolution, or not, and the new Farm Bill (whenever that is complete) leaves farmers concerned about the future.

As indicated in the Barometer survey there will likely be more pressure on land rents and the farmland market.  If you need help working through these difficult negotiations Halderman Can Help.  Call your local Halderman Area Representative or me in our main office at 800-424-2324 to talk about your specific needs, your property and your options.