BROWNSTOWN
A monthly nationwide survey of agriculture producers shows they are optimistic about the farm economy.
That optimism, however, is tempered by one very big unknown. That would be China, which has the second largest economy but has been beset with issues in recent months, particularly the coronavirus and a trade war with the United States.
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James Mintert, director of Purdue University’s Center for Commercial Agriculture, talked about the results of the latest survey during the 18th annual Farmers Breakfast on Tuesday at Pewter Hall in Brownstown. The Community Foundation of Jackson County organizes the event each year in partnership with Purdue Extension Jackson County.
Purdue and CME Group, a global markets company, established the barometer in the fall of 2015 and 400 ag producers across the nation are called once a month.
“We ask a series of questions, and we use that to compute what we call the ag economy barometer,” said Mintert, who also is a professor of agricultural economics.
After the telephone survey that takes about five minutes, the farmers are asked if they have anything on their minds they want to discuss, Mintert said. Trade, politics, regulation are just some of the key words mentioned.
“The barometer is kind of an index that measures people’s sentiment with respect to what’s going on in the agricultural economy,” he said.
Mintert said that sentiment is relatively volatile when it comes to the U.S. ag sector, much narrower than consumer sentiment surveys, which tend to be more stable.
The barometer has been trending up and took a big jump from December 2019 to its highest point ever in January of this year.
January’s survey was taken the week President Donald Trump signed a phase 1 trade agreement with China, and it also was assumed at that time that the trade agreement between the United States, Mexico and Canada was going to be signed. It later was passed by Congress and was signed Jan. 29 by Trump.
“People are becoming more optimistic about agriculture,” Mintert said. “The assumption is perhaps we would see a return to a more normal trade environment both in respect to China and perhaps Mexico and Canada, as well.”
He said ag producers, however, are still not quite so optimistic about the ag economy that they are willing to make large investments.
“So I would categorize that as a cautious optimistic perspective,” Mintert said. “Maybe a hopeful perspective.”
China is still tempering the ag economy outlook because of concerns about trade, he said, and the coronavirus, which has infected more than 75,000 people worldwide and killed more than 2,000.
After finishing up his talk, Mintert fielded a several questions from those in attendance.
“Are we going to be raising many cattle since everybody wants to get rid of cows?” Ron Wehrkamp of Dudleytown asked.
Mintert said in the short term he doesn’t expect there to be any change in livestock inventories.
In the long term, it’s what it is going on in respect to consumers and consumer needs, Mintert said.
“So your question is ‘Are consumers getting shifted away from meat to things like the Impossible Burger?’” he said.
Mintert said although non-meat products are getting a lot of press, they are still a very tiny slice of the market.
“The second thing is, it is not clear at this stage if consumers are going to substitute, for example, beef with Impossible beef or plant-based beef or if those products are going to primarily appeal to people who aren’t eating meat to start with but want a consumer product that has some meat-like characteristics,” he said. “I think that’s an open question. I don’t think we know the answer to that at this point.”
He said he also thinks it’s interesting that one of the more recent trends in foods is the move toward more natural and less processed food.
“If you look at the ingredient list of any of these Impossible type products, it’s anything but natural,” Mintert said. “It’s basically reading a chemical formula. It’s going to be interesting to see how that plays out with consumers.”
He also said one of the claims the companies marketing meatless meat seem to be making is that they use less resources and they are good for the environment because they are using less resources.
But if you look at the prices of these products, they are substantially higher, he said.
If they are using less resources, Mintert said he would expect them to cheaper prices.
“If the prices of meatless products don’t come down relative to the prices of ground beef, that suggests maybe those claims aren’t quite as accurate,” he said.
Ron Wischmeier of Vallonia asked how the ag economy barometer is going to read in the middle of February as compared to the middle of January.
“My guess is we probably retain much of that optimism because it was driven by the future,” he said. “I don’t think people have lost their optimism about the future.”
Seymour attorney Susan Bevers, who also is a member of the Community Foundation’s board, discussed endowments and what they mean to a community.
“The work that farmers do in feeding the world is a very similar concept to what the Community Foundation is doing,” she said. “We are feeding Jackson County — not literally. We’re not running a couple of goats out behind the office.”
The foundation is feeding all kinds of Jackson County charities, she said.
“… and we are doing that through endowments at the Community Foundation,” Bevers said. “An endowment is a donation — money or property — that goes to a nonprofit organization that uses the resulting investment income for a specific purpose. So most endowments are designed to keep the principal amount intact, and the resulting investment income is used for the charitable purpose.”
Unlike a charitable donation, a donation to an endowment continues long after the donor has passed away.
The Community Foundation can help start a new endowment or the money can be invested in one of the 170 existing endowments, she said.
“… and then we are going to administer that,” Bevers said.
The foundation presently manages more than $14 million in endowments, Bevers said.
She said $5,000 will start an endowment.
Once an endowment is started, people can continue to contribute each year and ask families and others to contribute gifts to it.