Farmer sentiment up after U.S.-China trade deal
Farmer optimism was up in January with the signing of the new U.S.-China trade deal.
The monthly Purdue University/CME Group Ag Economy Barometer reading increased 17 points from December to January. The jump largely reflects farmers’ hopes for the future: The “Index of Future Expectations” rose 24 points, to 179, while the “Index of Current Conditions” came out at 142, up one point from December.
The reading is based on a monthly nationwide survey of 400 agricultural producers. The January survey coincided with President Donald Trump’s signing of the phase one trade deal with China on January 15. China agreed to increase purchases of U.S. manufacturing, energy and agricultural goods and services by at least $200 billion over two years, although it didn’t specify which goods and services it would buy.
Bloomberg recently reported that Chinese officials may ask for flexibility on the deal as the country handles the coronavirus outbreak, which threatens China’s economy. Asked if the virus will give the United States more leverage in the next phase of trade discussions, White House economic adviser Larry Kudlow told Fox Business Network the coronavirus outbreak is “completely separate from trade, jobs and all the rest.”
Purdue researchers noted producer optimism about the future has increased noticeably over the past several months. In October, 55% of farmers said they expect to see U.S. agricultural exports increase over the next five years. That number jumped to 70% from November to January.