Nearly twice as many producers believe there is a risk of a trade war that will significantly damage farm exports as say that risk is low, according to a Purdue University poll of farmers and ranchers. The “undercurrent of concern” about trade was responsible for the decline in farmer confidence as gauged in the monthly Ag Economy Barometer, said Purdue economists.
The barometer fell by 5 points during March, to a reading of 135. Two-thirds of respondents said that now is a poor time to make major investments, the highest level registered since May 2017.
Overall, 47 percent said a damaging trade war is likely, compared with 28 percent who said it is not. And, as in the previous month, one-third of producers said the United States is likely to withdraw from NAFTA.
“These results are important for two reasons. First, nearly half of producers rated the risk of a trade war as at least somewhat likely. Second, producers’ concerns about risks to agricultural trade are broader than just the ongoing NAFTA situation,” said the three economists who oversee the monthly poll. “Taken a step further, these results indicate there is a good deal of uneasiness among producers regarding ag trade prospects, which in turn could be one reason behind the recent downturn in the percentage of producers indicating now is a good time to make large investments on their farms.”
Farmer confidence spiked in a “Trump bump” following the 2016 presidential election and has ranged from 130 points to 140 points in the Purdue poll since last April.