In contrast to the 2 most up-to-date presidential elections, the November mid-term election outcomes did little to swing farmer sentiment. The Purdue College/CME Group Ag Economic system Barometer got here in at a studying of 102 in November, unchanged from October. There was, nonetheless, slight motion in each of the barometer’s sub-indices. The Present Situations Index declined 3 factors to a studying of 98 whereas the Future Expectations Index elevated 2 factors to a studying of 104. 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 performed after the U.S. mid-term elections from November 14-18.
“Regardless that sentiment remained comparatively unchanged in November, producers are persevering with to take a look at their backside line,” stated James Mintert, the barometer’s principal investigator and director of Purdue College’s Heart for Industrial Agriculture. “Rising rates of interest mixed with excessive enter and vitality prices are creating lots of uncertainty on the farm degree.”
The Farm Monetary Efficiency Index improved modestly this month to 91, up 5 factors from October, nevertheless it stays 14% under this identical time interval final yr. Whereas almost one-third of producers proceed to precise concern that their farms’ monetary efficiency this yr will likely be worse than the prior yr, simply over two-thirds of producers count on their farms’ 2022 monetary efficiency to be equal to or exceed 2021’s. Nonetheless, excessive enter prices proceed to weigh on producers’ minds with 42% of respondents on this month’s survey citing that as their high concern within the yr forward. Simply over one-fifth (21%) of respondents selected rising rates of interest, whereas 14% cited enter availability and declining commodity costs as a high concern.
The Farm Capital Funding Index dropped again to its document low of 31 in November, erasing positive factors from the earlier month. Practically 80% of respondents indicated now’s a “unhealthy time” to make massive investments in farm equipment and of these, 47% selected “rising costs of farm equipment and new development” as the first motive. By comparability, solely 10% of respondents felt now’s a “good time” to make massive investments.
Given the sharp rise in vitality costs that is taken place this yr, this month’s survey requested producers how they’ve responded to the associated fee enhance. Simply over a fourth (27%) of this month’s respondents indicated they’ve made adjustments of their operation due to rising costs for vitality. Of those that indicated they made adjustments, 33% indicated they diminished tillage, 24% diminished nitrogen charges and/or modified utility timing, 11% elevated their use of no-till, and eight% stated they diminished crop drying.
Farmland public sale leads to the Corn Belt proceed to set new document highs, but producers present indicators of turning into much less bullish on farmland values. The Quick-Time period Farmland Worth Expectation Index declined 4 factors to a studying of 129 and the Lengthy-Time period Farmland Worth Expectation Index remained unchanged at 144. Each indices are nicely under the highs established in fall 2021. When requested to look forward one yr, 12% of respondents this month stated they count on values to say no in comparison with simply 4% who felt that manner a yr in the past. Amongst producers who count on farmland values to rise over the subsequent 5 years, over half (52%) selected non-farm investor demand as the first motive for his or her optimism.
Learn the total Ag Economic system Barometer report right here.
