Farmer sentiment weakened once more in October because the Purdue College/CME Group Ag Economic system Barometer dropped 10 factors to a studying of 102. Each barometer’s sub-indices additionally declined this month. The Present Situations Index dipped 8 factors to a studying of 101, whereas the Future Expectations Index dropped 11 factors to a studying of 102. The “Ag Economic system Barometer” is calculated every month from 400 U.S. agricultural producers’ responses to a phone survey. This month’s survey was carried out Oct. 10-14.
“Concern over rising rates of interest grew as soon as once more in October and is including to the unease amongst producers who’re apprehensive about its affect on their farm operations,” mentioned James Mintert, the barometer’s principal investigator and director of Purdue College’s Heart for Business Agriculture. “Moreover, difficult transport situations all through the Mississippi River valley have hampered exports not too long ago, and the corresponding widespread weakening of corn and soybean foundation ranges may very well be contributing to heightened unease about monetary efficiency.”
Producer concern in regards to the monetary efficiency of their farms was one of many main drivers of weakening sentiment in October. The Farm Monetary Efficiency Index fell 13 factors this month to 86 and was a distillation of producers’ issues about excessive enter prices mixed with weaker commodity costs. Looking forward to subsequent yr, over 40% of producers considered excessive enter prices as their high concern, adopted by 21% who selected rising rates of interest, 13% who selected decrease output costs and 13% who selected enter availability.
After dipping to a brand new file low final month, the Farm Capital Funding Index improved 7 factors this month to a studying of 38. Producers who considered this as a foul time for big investments revealed that rising costs for farm equipment and new building (40% of respondents) was the first cause for his or her unfavourable outlook, adopted by rising rates of interest (20%) and uncertainty about farm profitability (17%).
Producers’ expectations for short- and long-term farmland values rose this month. The Brief-Time period Farmland Worth Expectation Index rose 10 factors to a studying of 133, whereas the Lengthy-Time period Farmland Worth Index rose 5 factors to 144. Power in each indices comes on the heels of stories from farmland auctions across the Corn Belt that land values are setting new file highs once more this fall. Even with this month’s rise, each indices stay weaker than a yr earlier. The short-term index this month was 15% decrease and the long-term index was 11% decrease than in October 2021.
Farm coverage discussions are underway as Congress prepares for debate on a brand new Farm Invoice in 2023. In consequence, a number of farm coverage associated questions had been included on this month’s barometer survey. Crop producers had been requested which two insurance policies or applications could be most essential to their farm within the upcoming 5 years. A couple of-third (36%) of crop producers selected rate of interest coverage as crucial coverage problem for his or her farming operation, adopted by the crop insurance coverage program (27%), environmental coverage (16%), conservation coverage (11%) and local weather coverage (10%). When requested how efficient the present ARC-County and Worth Loss Protection (PLC) applications are at offering a monetary security web, 72% of respondents rated the 2 applications as both “considerably efficient” (61%) or “very efficient” (11%). When the identical query was posed relative to crop insurance coverage, 84% of respondents rated it as both “considerably efficient” (56%) or “very efficient” (28%).
The complete Ag Economic system Barometer report may be accessed right here. The positioning additionally provides extra assets – resembling previous stories, charts and survey methodology – and a kind to join month-to-month barometer e-mail updates and webinars.
