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Farmers aren't ready to heed Donald Trump's advice to buy bigger tractors after his initial trade deal with China.
More than half of U.S. farmers plan to spend less on capital equipment this year, and only 13% plan to spend more, according to a survey conducted by the American Farm Bureau Federation, the nation's largest general farm organization. Fewer than a quarter of farmers expect higher prices for their crops or livestock in the coming year, according to the survey.
Commodity markets have had a lukewarm response to the trade agreement, which includes commitments by China buy more U.S. farm products. Soybean futures in Chicago are down slightly since Dec. 12, the day before Trump announced the China agreement.
“I think producers -- like the markets -- are anxiously awaiting confirmation of China's purchases,” said John Newton, chief economist for Farm Bureau. “Once we see actual purchases I think we could see a price response.”
Trump has repeatedly told audiences that farmers will need to buy “bigger tractors” to meet rising export demand because of his phase-one deal with China and other trade agreements.
The Farm Bureau conducted an informal online survey of 300 farmers and ranchers between Jan. 8 and Feb. 14, Newton said. He cited the survey results in a presentation at the U.S. Department of Agriculture's annual outlook forum Thursday in Arlington, Virginia.
To contact the reporter on this story: Mike Dorning in Washington at mdorning@bloomberg.net
To contact the editors responsible for this story: Joe Sobczyk at jsobczyk@bloomberg.net, James Attwood, Millie Munshi
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