Lower commodity prices contributed to a significant drop in the Purdue University/CME Group Ag Economy Barometer for August.

The survey, based on responses from 400 different agricultural producers across the country, dropped 29 points from July to a score of 124. The steep drop follows two straight months of sharp gains, when producers reported stronger expectations in June and July. The different indexes measuring farmer’s expectations of economic conditions also saw a sharp decline, as the barometer's Index of Current Conditions dropped 19 points and the Index of Future Expectations dropped 34 points from July to August.

Declines can be attributed in part to the changing commodity prices, according to James Mintert, the barometer’s principal investigator and director of Purdue University’s Center for Commercial Agriculture.

“Sharp declines in most commodity prices during July and early August weighed heavily on farmer sentiment this month,” said Mintert.

According to Purdue, "virtually all" of the contacts for the survey took place after an August USDA report issued larger than expected production forecasts which, in turn, caused a slip in prices. 

The Market Facilitation Program (MFP) payments that were announced only partially alleviated concerns, and 58% of farmers said “they expect another MFP payment to be made to U.S. farmers for the 2020 crop year,” according to a Purdue press release.

For more information, the entire August Ag Economy Barometer report is available.

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