US farmer sentiment dips amid weaker view of present situations

9 September 2023

3 minute learn

Producer sentiment was notably decrease in August, because the Purdue College/CME Group Ag Financial system Barometer index dipped 8 factors to a studying of 115. This month’s decline was fuelled by producers’ weaker notion of present situations each on their farms and in US agriculture. The Present Circumstances Index fell 13 factors to a studying of 108. The Future Expectations Index additionally declined, down 5 factors in August to a studying of 119. 

“Rising rates of interest and issues about excessive enter costs proceed to place downward stress on producer sentiment,” stated James Mintert, the barometer’s principal investigator and director of Purdue College’s Heart for Business Agriculture. “This month over half (60%) of the producers we surveyed stated they anticipate rates of interest to rise within the upcoming 12 months.”

When requested about their prime issues for his or her farming operations within the subsequent 12 months, producers continued to level to larger enter costs (34% of respondents) and rising rates of interest (24% of respondents). Regardless that crop costs weakened considerably this summer season, just one in 5 producers (20% of respondents) selected declining commodity costs as one among their prime issues.

The Farm Capital Funding Index was decrease this month, falling 8 factors to a studying of 37. Rising costs for farm equipment and new development together with rising rates of interest proceed to be the 2 mostly cited causes for his or her damaging view. In the meantime, producers’ score of farm monetary situations modified little in August, because the Farm Monetary Efficiency Indexdeclined only one level to a studying of 86.

Regardless of growing issues about rising rates of interest, producers stay cautiously optimistic about farmland values. The Brief-Time period Farmland Values Expectation Index rose one level to 126, whereas the long-term index was unchanged at a studying of 151. 4 out of ten respondents (39%) stated they anticipate farmland values to rise over the subsequent 12 months, whereas 13% stated they search for values to say no within the subsequent 12 months. When requested about their longer-term view of farmland values, six out of ten (63%) of respondents stated they anticipate values to rise over the subsequent 5 years, whereas 12% stated they anticipate values to fall.

To higher perceive the utilization of carbon contracts in row-crop agriculture, corn and soybean growers had been requested in regards to the kinds of conversations they’ve had with these firms. Within the August survey, 6% of corn and soybean growers stated they’ve engaged in discussions with firms about receiving funds to seize carbon on their farms, whereas simply 2% stated that they had signed a carbon contract. Almost half (47%) of the farms who mentioned contract phrases with an organization stated they had been provided a fee charge of $10 to $20 per metric ton of carbon captured. Among the many farms who engaged in discussions, however selected to not signal a carbon contract, half stated it was as a result of the fee stage was too low.

This month’s Ag Financial system Barometer survey was performed from August 14-18, 2023.