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CME Group's Ag Economy Barometer Plummets in April
USAgNet - 05/08/2019

The Ag Economy Barometer plummeted in April, declining to a reading of 115, an 18-point decline compared to March when the sentiment index stood at 133. The 18-point decline in the index was the fourth largest one-month fall in the barometer since data collection began in October 2015.

The barometer's decline was driven by worsening perceptions of both current economic conditions and weaker expectations for the future as the Index of Current Conditions fell 21 points to a reading of 99 while the Index of Future Expectations declined 16 points to a reading of 123.

Producers' negative sentiment was further borne out by their perspective on making large investments in their farming operations. The percentage of producers that viewed now as a good time to make large investments declined to 22 percent from 26 percent a month earlier, while the percentage that viewed now as a bad time to make large investments increased to 74 percent from 69 percent in March.

When combined these responses pushed the Large Farm Investment Index to a reading of 48 in April, 9 points lower than in March and the fourth weakest reading of the investment index since fall 2015.

Farmers' expectations for farmland prices in the upcoming 12-months also weakened in April as the percentage expecting higher values fell to 13 percent from 14 percent while the percentage expecting lower values increased to 28 percent from 25 percent.

The largest response category, those expecting farmland values to remain about the same, fell to 59 percent from 61 percent. Although the one-month change in farmers' perspective on farmland values was more modest than the decline in the investment index, it still stands in sharp contrast to the perception producers had of farmland values a year earlier.

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