For the second consecutive month, 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 the gains in farmer sentiment since the 2016 election. April’s decline leaves the Ag Economy Barometer 72 points below its record high, which was in February.
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.
Farmers indicated that, in the current environment, they are reluctant to make large capital investments in their 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.
Two-thirds of farmers in this month’s survey said they were very worried or fairly worried about the impact of coronavirus on their farms’ profitability this year. Fifty-four percent of respondents said they anticipate applying for one of the federal government’s COVID-19 related financial assistance programs. When asked what their number one concern is regarding their farm and COVID-19, 42 percent of respondents said they were concerned about their farm’s market access, and 37 percent said their number one concern was financial. Just 13 percent of producers said their number one concern regarding their farm was health and safety.
The barometer is based on a monthly survey of 400 U.S. producers.