American farmers continue to sound glum about their economic situation, but they’re still confident about the future.
Some of that confidence is built upon an assumption that U.S. agricultural exports will continue to grow, despite the trade war with China that has depressed soybean prices.
“Producers seem more optimistic about the future of agricultural exports,” says the Purdue University/CME Group Ag Economy Barometer summary for March.
“Only eight percent of producers in the March survey said they expect agriculture exports to decrease in the next five years. Meanwhile, 68 percent expect exports to increase, which was the most optimistic perspective on agricultural exports provided by farmers since the Purdue researchers began posing questions on exports in May 2017.”
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That unusual growth in optimism about agricultural exports comes in the face of the lingering dispute with China, and after U.S. – Mexico agricultural trade was complicated by the wrangling over revisions to the North American Free Trade Agreement.
“With respect to the trade dispute with China, 77 percent of producers were confident that it will be resolved in a way that benefits U.S. agriculture,” says the report, which provides a monthly assessment of farmer confidence.
“However, less than half expect the trade situation with China to be resolved before July 1.”
In general, U.S. farmer spirits are depressed, hurt by years of poor returns since the end of the commodity boom.
The Purdue survey finds that five to seven percent of U.S. farmers are carrying operating debt into 2019-20 from 2018-19, which it sees as a form of “financial stress.”
About 59 percent expect their financial results to be about the same in 2019, while 21 percent expect things to improve and 20 percent expect their situation to worsen.
The overall mood slightly worsened in March, regardless of the optimism about future exports, with the barometer dropping from 136 in February to 133 in March.
Compared to a year ago, U.S. farmers’ view of “Future Expectations” has improved, but their assessment of “Current Conditions” has worsened.
About one-quarter of U.S. farmers now expect farmland prices to be lower in 2020 than now, while 15 percent expect them to be lower in five years’ time. Both are significant increases in pessimism from February levels.
