Farmers are becoming more concerned about the future for US agriculture and their farms, according to the Perdue University/CME Group Ag Economy Barometer.
The barometer was based on a mid-August survey of 400 US agricultural producers with nearly all responses following the US Department of Agriculture’s (USDA) 12 August Crop Production report, the university’s Center for Commercial Agriculture said on 3 September.
“Sharp declines in most commodity prices during July and early August weighed heavily on farmer sentiment,” said James Mintert, the barometer’s principal investigator and director of Perdue University’s Center for Commercial Agriculture.
“While the USDA’s announcement of the Market Facilitation Program (MFP) payment rates did help alleviate concerns about 2019 income for many farmers, the big decline in the Index of Future Expectations – which dropped 34 points in August – indicates farmers are becoming more concerned about the future for US agriculture and their farms.”
The MFP provides assistance to farmers, with the 2019 package announced on 25 July intended to partially compensate US producers for commodities affected by foreign retaliatory tariffs.
Farmers were asked by the USDA to what degree did US$16bn in MFP payments to US farmers relieve their concerns about the impact of tariffs on their 2019 farm income.
Of the respondents, 71% said they felt the 2019 MFP would either “completely or somewhat relieve” their concerns about tariffs’ impact on 2019 farm income, the Center said.
However, the remaining 29% said “not at all,” indicating that some farmers felt the MFP payments fell short of making up for income losses attributable to the ongoing tariff battles.
The ongoing US-China trade war over the past year has seen both countries impose billions of dollars worth of tariffs on each other’s goods.
China announced on 23 August that it would hit 5,078 US items worth US$75bn with new tariffs and hikes to existing duties, including 5% tariffs on soyabeans.
In reply, US President Donald Trump announced he would raise 25% tariffs on US$250bn worth of Chinese goods to 30% from 1 October. In addition, fresh tariffs on an additional US$300bn of Chinese goods, announced earlier on 1 August, would now be at a rate of 15% instead of 10%.