After months of improved farmer sentiment toward the Ag economy, things took a different turn in the August Purdue/CME Group Ag Economy Barometer. Declining commodity prices weighed heaviest on farmer outlooks in August. The barometer index fell to 95 in the month of August, down from 112 in July. That represents the largest one month decline since November 2015. Farmer sentiment about the current economic climate and their future expectations both fell in August, which was a sharp contrast from July, when farmers were positive about their long-term prospects despite current economic concerns. Farmer outlooks were more positive after a spring rally in commodity prices, but near ideal growing conditions in most corn and soybean areas pushed prices sharply lower. The USDA forecast of another record harvest led to worries of increasing carryover stocks in both crops and the lowest corn prices in a decade. Tighter cash flow margins are causing farmers to lower their anticipated production costs. The survey also asked producers about anticipated 2017 input costs, and despite the low commodity prices, most producers actually anticipate their input costs increasing in 2017.
