WEST
LAFAYETTE, Ind., Aug. 6, 2024
/PRNewswire/ -- Three broad-based measures of farmer sentiment
improved in July as the Purdue
University/CME Group Ag Economy Barometer index rose 8
points to 113, the Index of Current Conditions increased by 10
points to 100, and the Index of Future Expectations at 119 was 7
points higher than a month earlier. Despite declines in corn and
soybean prices from mid-June to mid-July — Eastern Corn Belt cash
prices fell 11% and 5%, respectively — farmer sentiment improved in
July. Responses to the individual questions attribute this positive
shift to fewer respondents reporting worsened conditions compared
to a year ago and a decrease in those expecting negative future
outcomes. This month's Ag Economy Barometer survey was conducted
from July 15-19, 2024.
The July survey showed that high input costs remained the
biggest concern for 34% of farmers. Additionally, the risk of lower
crop and livestock prices continues to worry producers, with 29%
citing it as a top concern, up from 25% in June. Reflecting the
signals from the Federal Reserve that interest rates have peaked,
only 17% of respondents cited rising interest rates as a top
concern, down from 23% last month.
The Farm Financial Performance Index dropped 4 points in July to
81, 6 points lower than in July 2023.
The decline in financial performance expectations reflected
farmers' worries about weakening commodity prices and high input
costs following improvements in the May and June indices. Although
production costs for principal crops, including corn and soybeans,
have decreased year over year, output prices have also fallen,
raising the possibility of a cost-price squeeze for U.S. crop
producers.
Despite concerns about farms' financial performance, the Farm
Capital Investment Index rose 6 points in July to 38, though it
remains weak, at 7 points lower than in July
2023. This improvement was due to a slight decrease in the
number of producers who believe it's a bad time to make large
investments, which dropped from 80% in June to 75% in July.
"Declines in crop prices point to lower producer incomes this
year, so the increase in optimism was somewhat puzzling," said
James Mintert, the barometer's
principal investigator and director of Purdue
University's Center for Commercial Agriculture. "Fewer
producers citing rising interest rates as a primary concern for the
upcoming year corresponds with the modest improvement in their
perspectives on capital investments, but respondents continue to
express hesitancy to make large investments."
July saw a small improvement in the Short-Term Farmland Value
Expectations Index, rising to 118 from 115 in June. This was driven
by more respondents expecting stable farmland values over the next
year. At the same time, the Long-Term Farmland Value Expectations
Index dropped 6 points from June to 146, with fewer farmers
expecting values to rise over the next five years and more
anticipating they will remain unchanged.
As nationwide discussions begin for the 2025 crop year's
farmland leases, the July survey revealed that nearly three-fourths
(72%) of crop farmer respondents expect cash rental rates to remain
roughly the same as in 2024. Among the remaining respondents, views
were nearly evenly divided, with 15% anticipating a rise in rates
and 13% expecting a decline.
About the Purdue University
Center for Commercial Agriculture
The Center for Commercial Agriculture was founded in 2011
to provide professional development and educational programs for
farmers. Housed within Purdue
University's Department of Agricultural Economics, the
center's faculty and staff develop and execute research and
educational programs that address the different needs of managing
in today's business environment.
About CME Group
As the world's leading derivatives marketplace, CME
Group enables clients to trade futures, options, cash and OTC
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rates, equity indexes, foreign exchange, energy, agricultural
products and metals. The company offers futures and options on
futures trading through the CME Globex platform, fixed income
trading via BrokerTec and foreign exchange trading on the EBS
platform. In addition, it operates one of the world's leading
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About Purdue University
Purdue University is a public
research institution demonstrating excellence at scale. Ranked
among top 10 public universities and with two colleges in the top
four in the United States,
Purdue discovers and disseminates
knowledge with a quality and at a scale second to none. More than
105,000 students study at Purdue across
modalities and locations, including nearly 50,000 in person on the
West Lafayette campus. Committed
to affordability and accessibility, Purdue's main campus has frozen tuition 13 years in
a row. See how Purdue never stops in
the persistent pursuit of the next giant leap — including its first
comprehensive urban campus in Indianapolis, the Mitchell E. Daniels, Jr.
School of Business, Purdue Computes and the One Health initiative —
at https://www.purdue.edu/president/strategic-initiatives
Writer: Morgan French, mmfrench@purdue.edu
Source: James Mintert, 765-494-7004,
jmintert@purdue.edu
Image URL:
https://www.purdue.edu/uns/images/2024/Agbarometer0724-LO.jpg
Image Caption:
Farmer sentiment improves despite financial performance
concerns. (Purdue/CME Group Ag
Economy Barometer/James Mintert)
CME-G
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SOURCE CME Group