While the dairy industry and many agriculture commodities have seen better prices in the last few weeks, market fluctuations and pessimism still prevail in the countryside. The Purdue University-CME Group Ag Economy Barometer released its May survey last week showing that interviewed farmers remain concerned over the impacts of COVID-19 and the greater national economic situation.
“Over 70% of farmers responding to our May survey said they were either very worried (34%) or fairly worried (37%) about the impact of coronavirus on their farms’ profitability,” the study’s authors James Mintert and Michael Langemeier said.
The farmers’ top concerns were the impact of the virus on market access (42%) and finances (39%). Farmers also were worried to a lesser extent (11%) about their health and safety.
“Finally, two-thirds of farmers in the May survey said they think it will be necessary for Congress to pass another bill to provide more economic assistance to U.S. farmers,” the Purdue economists explained.
The May 27 Hoard’s Dairyman’s DairyLivestream audience concurred with survey responders. More than 75% of listeners felt that available aid would cover between 25% and 75% of their pandemic losses.
Far from recovered
Farmer sentiment as measured monthly by Purdue’s Ag Barometer remains 40% below February levels, although the May numbers are a slight improvement from April levels. A similar trend was identified in farmers’ willingness to make large investments in their operations, with a significant decline in this metric since February. Further, one out of four farmers renting land said they planned to ask landowners to lower cash rent payments in 2021 due to COVID-19.
Interestingly, the last time that the farmer sentiment as measured by the Ag Barometer was as low as it was in March and April 2020 was a year ago in May 2019. At that time, spring planting was halted by heavy rains. Prior to that, one has to look back to 2016 to see such pessimistic reports on the Ag Barometer.