Purdue Report | ¹û¶³´«Ã½ Our Members Bring Choice, Value & Innovation to Agriculture Fri, 17 Feb 2023 18:20:55 +0000 en-US hourly 1 https://wordpress.org/?v=5.2.4 /wp-content/uploads/2023/09/fema-favicon-75x75.png Purdue Report | ¹û¶³´«Ã½ 32 32 Farmer Sentiment Continues to Rise into 2023 /news/farmer-sentiment-continues-to-rise/ Tue, 14 Feb 2023 17:18:15 +0000 /?p=21906 °Õ³ó±ðÌýPurdue University-CME Group Ag Economy Barometer Index rose again in January, to a reading of 130, 4 points above its 2022 year-end index value. The January survey results also pushed the index 34% above its 2022 low point which occurred last June. The barometer’s modest rise in January was primarily attributable to better expectations for the future as the Future Expectations Index rose 5 points to 127 while the Index of Current Conditions, with a value of 136, changed little compared to December. 

The Index of Current Conditions rose only 1 point to a reading of 136. Although producers were a bit more optimistic about the future this month, they again reported expectations for tighter margins in 2023 than in 2022.

The Farm Capital Investment Index was up 2 points this month to 42; however, that still left it 7% lower than a year earlier. Just over 7 out of 10 survey respondents said they think now is a bad time to make large investments in their farm operation. Among respondents who felt now is a bad time, 39% said high prices for machinery and new construction, 25% said rising interest rates, and 12% said uncertainty about farm profitability was the primary reason.

Interest rates are becoming a bigger concern for farmers. As recently as November, just 19% percent of farmers in the monthly barometer survey chose rising interest rates as a key factor impacting their perspective on investments.

The Ag Economy Barometer is calculated each month from 400 U.S. agricultural producers’ responses to a telephone survey. This month’s survey was conducted from January 16-20.

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]]> Farmers Concerned Over High Interest Rates /news/farmers-concerned-over-high-interest-rates/ Tue, 08 Nov 2022 19:18:35 +0000 /?p=20167 Farmer sentiment weakened again in October as the Purdue/CME Group Ag Economy Barometer fell to a reading of 102, down 10 points compared to a month earlier. Results suggest farmer sentiment is on par with that of late 2015 and early 2016 when farm income was sharply lower than it has been in the last two years.
Concerns about their farm’s financial performance was one of the drivers of weakening sentiment among producers. This month’s weaker financials performance reading is a distillation of producers’ concerns about high input costs combined with weaker commodity prices. Challenging shipping conditions throughout the Mississippi River Valley have hampered exports recently. Looking ahead to next year, 40% of producers view high input costs as their top concern followed by 21% who are concerned about rising interest rates.
Although fewer producers this month said they view now as a bad time to make large investments, which helped push the Farm Capital Investment Index higher, the index remains at a weak level with the cost of new machinery and construction a major concern.

Interest rates are also a hot topic as farm policy discussions are underway while Congress prepares for debate on a new Farm Bill in 2023. Crop producers were asked which two farm policies or programs would be most important to their farm in the upcoming five years. The top choice was interest rate policy (36% of respondents) followed by crop insurance program (27% of respondents).

The Purdue University-CME Group Ag Economy Barometer sentiment index is calculated each month from 400 U.S. agricultural producers’ responses to a phone survey. Visit P to view the complete survey results.

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