Farmers are feeling less optimistic this month according to the September Purdue University/CME Group Ag Economy Barometer. The September barometer reading was 114 down 15 points since last month and it's lowest level since October 2016.
"When we asked people would they say their farm operation is better off worse off or about the same compared to a year ago the percentage of people saying worse off jumped from 47% to 54%," says Jim Mintert, Director of the Center for Commercial Agriculture at Purdue. "As you look at that data you'll notice that it's the worst rating we've had in well over a year with respect to the percentage of people who say they were worse off than a year earlier."
Also, on the September survey, 33% of producers said they expect their farm's financial condition to be worse a year from now and that's also up 15 points compared to June.
"I think everyone is tightening their belts a little bit," says Kris Kavan a farmer in Cedar Bluffs, Nebraska. "You can just feel it as you talk to neighbors or drive around that everyone is staying status quo but not making a lot of big changes."
On the September survey, 54% of respondents said their farms' financial condition was worse than a year earlier, compared to 47% in August and noticeably worse than the 36% recorded in May.
Researchers also seeing trade conflicts as a major drag on producer expectations following the escalations of trade tensions between the U.S. and China.
In the survey, 70% or more of farmers in the survey indicated that trade conflicts are expected to lower their farm's net income in 2018. In September 72% of respondents said they expect an income decline of more than 10%.
"I think if the China tariffs don't get resolved by next planting season, it's going to impact the amount of soybeans planted," says South Bend, Indiana farmer Jeff Peterson. "I think guys may grow a little more corn and that may impact the prices later. This has to get resolved within the next few months."
Because of these trade conflicts, lower prices and poor basis for beans, farmers are indicating plans to store more of the crop.
According to the Barometer, "Nearly one-fifth of soybean growers plan to store a higher percentage of their production than usual whereas nearly two-thirds of growers said they planned to store the same percentage of their soybeans as usual. Among producers storing a higher percentage of their soybean crop than usual, two-thirds said the trade conflict with China is the primary factor influencing their soybean storage decision."