Purdue College/CME Group Ag Economic system Barometer index dipped 8 factors
9 September 2023
3 minute learn
Producer sentiment was notably decrease in August, because the Purdue College/CME Group Ag Economic system Barometer index dipped 8 factors to a studying of 115. This month’s decline was fuelled by producers’ weaker notion of present circumstances each on their farms and in US agriculture. The Present Situations 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 strain on producer sentiment,” stated James Mintert, the barometer’s principal investigator and director of Purdue College’s Heart for Industrial 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 high issues for his or her farming operations within the subsequent 12 months, producers continued to level to greater enter costs (34% of respondents) and rising rates of interest (24% of respondents). Though crop costs weakened considerably this summer time, just one in 5 producers (20% of respondents) selected declining commodity costs as certainly one of their high 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 building 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 circumstances 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 following 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 following 5 years, whereas 12% stated they anticipate values to fall.
To raised perceive the utilization of carbon contracts in row-crop agriculture, corn and soybean growers had been requested in regards to the varieties 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 they’d signed a carbon contract. Practically 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 degree was too low.
This month’s Ag Economic system Barometer survey was carried out from August 14-18, 2023.
