The Ag Economy Barometer plummeted in March, dipping 47 points (28%) from a month earlier to a reading of 121.
The point drop was the largest one-month fall in the life of the index, which dates to October 2015, according to a news release from Purdue University.
The Ag Economy Barometer is generated by Purdue University and the CME Group each month from 400 U.S. agricultural producers’ survey responses. This month’s survey was conducted from
March 16-20 as the coronavirus crisis escalated in the United States and around the world.
Declines in agricultural commodity prices and concerns about the coronavirus crisis’ impact on the U.S. economy and agricultural sector weighed heavily on farmer sentiment in March.
The Index of Current Conditions and the Index of Future Expectations plunged during March as both indices experienced their largest one-month declines since data collection began in 2015. The Index of Current Conditions declined 43 points and the Index of Future Expectations dropped 49 points, both compared to one-month earlier.
Seventy-four percent of respondents to the March survey said they were either “fairly worried” (34%) or “very worried” (40%) about the impact of the virus on their farm’s profitability this year.
Coinciding with their concern about the coronavirus impact, an increasing number of farmers said they expect their farm’s financial performance this year to be worse than last year. For example, in March, 40% of respondents said they expect their farm’s financial performance in the upcoming year to be worse than a year earlier, compared to just 30% of respondents who felt that way in December.
Expectations for a weaker business climate in the U.S. agricultural sector were also evident. The percentage of producers expecting good times in the agricultural economy in the next 12 months fell from 50% in February to 19% in March.
Farmers also became less optimistic in March about the outcome of the trade dispute with China.
The percentage of farmers expecting the soybean trade dispute with China to be resolved soon, which peaked in January at 69%, fell to 47%. This was the second month in a row that expectations for a quick resolution to the trade dispute declined.
At the same time, the percentage of producers who expect the trade dispute to be resolved in a way that’s ultimately beneficial to U.S. agriculture declined to 68% from an average of just over 80% who felt that way in January and February.
More farmers in the March survey said they expect to receive a Market Facilitation Program payment on their 2020 crop production than did a month earlier.