Ag Barometer Index Drops Below 100 as Coronavirus Disrupts Agriculture
Coronavirus concerns, commodity price declines, and supply-chain disruptions sink producer sentiment to a three-year low, according to the April Purdue University/CME Group Ag Economy Barometer. The barometer recorded a reading of 96, marking the first time the barometer has fallen below 100 since October 2016 and registering 72 points below its record high just two months prior. The Ag Economy Barometer is based on responses from 400 U.S. agricultural producers and this month’s survey was conducted from April 19-24, 2020.
Producers’ expectations for current and future agricultural economic conditions also declined sharply. The Index of Current Conditions suffered its largest one-month drop, down 39 points in April to a reading of 72, and the Index of Future Expectations fell 18 points to a reading of 108. April’s decline pushed the Current Conditions Index 53% below its all-time high set back in February, while the Future Expectations Index fell 39% over the same two-month time period.
“Over the past two months, producers have felt the first shock waves being created by the coronavirus,” said James Mintert, the barometer’s principal investigator and director of Purdue University’s Center for Commercial Agriculture. “Disruptions in the supply chain are causing many to look at ways they can mitigate risk in this uncertain environment and sharp declines in commodity prices have added significant financial pressure on many U.S. farming operations.”
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