American farmer sentiment has plunged to levels not seen since October 2016, the month before Donald Trump’s election victory, as the U.S.-China trade war drags on.
The Purdue University/CME Group’s agricultural sentiment index fell to 101 points in May from 115 in April. The gauge is based on a survey of 400 agricultural producers. The declines “effectively erased all of the large improvement in farmer sentiment that took place following the November 2016 election,” the researchers said in a statement Tuesday.
Farmers comprise the bedrock of the rural base that catapulted Trump to the White House. On May 23, the U.S. Department of Agriculture announced a second farm assistance program with a pledge of $16 billion to help growers stung by the president’s trade spat with China. The administration rolled out a similar program last year.
Still, the aid package faced a muted response. Farmers have said they’d prefer a resumption of normal trade over government handouts. Several farm-state lawmakers say the payments are too meager. And the money risks distorting agriculture markets.
Trump’s $16 Billion Farmer Trade Aid Package Leaves Few Happy
In May, 18% of farmers said it was a “good time” to make large farm investments, while 81% stated it was a “bad time,” lowering the investment index to the lowest reading since data tracking began in October 2015, the Purdue/CME survey showed.
“Farmers are facing tough decisions in the midst of a wet planting season and a lot of uncertainty surrounding trade discussions,” James Mintert, the barometer’s principal investigator and director of Purdue University’s Center for Commercial Agriculture, said in the statement.
Trump is also now proposing 5% tariffs against Mexico as talks over immigration continue with the country. Retaliation by Mexico is virtually certain to once again strike Trump’s political base.