News Economy
Low confidence in German and American farmers
The mood among the German peasants varied. In the short term, the economic outlook has improved somewhat, while the mood remains gloomy for the longer term. In the US, there is no sign of a rebound and farmer confidence fell to its lowest level since May 2020, just after the outbreak of the corona pandemic.
This is apparent from the economic barometer of the Deutscher Bauernverband (DBV) and the AG Economy Barometer of Purdue University and the CME Group. The German farmers who participated in the survey indicate that the current situation has improved compared to the previous survey in December. The index of the business cycle barometer is therefore 10,8 points higher in March at 2 points than in December. The willingness of German farmers to invest has also improved slightly compared to the same period a year earlier. There are more plans, especially for sustainable energy and machines. The enthusiasm to invest in company buildings and stables is lagging behind. Liquidity has improved somewhat, but 14% of participating companies said they were short or very short on cash.
In the longer term, the Germans are less well-disposed. Livestock farmers and, to a lesser extent, arable farmers who grow a lot of fodder crops in particular are more gloomy compared to the previous survey. This is due to the high prices for fertilizer, energy and feed. This is offset by considerably higher prices for grain, milk and meat.
US mood deteriorated
American farmers see few bright spots at the moment. Again, it is the higher production costs that dampen the mood. Unlike their German counterparts, the Americans are also concerned about the availability of means of production. Supply chains had already been severely disrupted by corona and that has been exacerbated by the war in Ukraine. That only adds to the uncertainty. Nearly two-thirds of participants in the Ag Economy Barometer expect that the main effect of the war in Ukraine on US agriculture is a further rise in production costs. The investment plans in machines and buildings among Americans are lower compared to a year earlier. Sentiment on the land market is also weakening. After months in which prices were mainly driven up, there is now a small correction.
Jurphaas Lugtenburg
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