Ag economy barometer declines again |

WEST LAFAYETTE — Farmer sentiment weakened again in October as the Purdue University/CME Group Ag Economy Barometer fell 10 points to a reading of 102.

Both barometer sub-indices also declined this month. The Current Situation Index fell 8 points to a reading of 101, while the Future Expectations Index fell 11 points to 102. The “Ag Economy Barometer” is calculated each month from the responses of 400 US agricultural producers to a telephone survey. This month’s survey is Oct. Was done on 10-14.

“Concerns about rising interest rates rose once again in October and are fueling uneasiness among producers who worry about the impact on their farm operations,” said James Mintert, Barometer’s principal investigator and director of Purdue University’s Center for Commercial Agriculture.

“Furthermore, challenging shipping conditions in the Mississippi River Valley have recently hampered exports, and the corresponding widespread weakness in corn and soybean levels may contribute to heightened anxiety about financial performance.”

Producer concerns about the financial performance of their farms were one of the primary drivers of weak sentiment in October. The Farm Financial Performance Index fell 13 points to 86 this month, a distillation of producer concerns about higher input costs coupled with weak commodity prices. Looking ahead to next year, more than 40% of producers saw higher input costs as their top concern, followed by 21% who chose rising interest rates, 13% who chose lower output prices and 13% who chose input availability.

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After hitting a new record low last month, the Farm Capital Investment Index improved seven points to 38 this month. Growers who see this as a bad time for major investment revealed that rising farm machinery and new construction costs (40% of respondents) were the primary reason for their negative outlook, followed by rising interest rates (20%) and uncertainty about farm profitability (17%).

Producer expectations for short- and long-term farmland values ​​rose this month. The short-term farmland value expectation index rose 10 points to 133, while the long-term farmland value index rose five points to 144. Strength in both indexes comes on the heels of reports of farmland auctions around the Corn Belt. Values ​​are again setting new record highs this fall. Even with this month’s uptick, both indices remain weak from a year ago. The short-term index was 15% lower this month and the long-term index was 11% lower than October 2021.

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As Congress prepares to debate a new farm bill in 2023, the farm policy debate continues. As a result, this month’s Barometer survey included several questions related to agricultural policy.

Crop growers were asked which two policies or programs would be most important to their farm over the next five years. More than one-third (36%) of crop producers chose interest rate policy as the most important policy issue for their farming operations, followed by crop insurance programs (27%), environmental policy (16%), conservation policy (11%) and climate. Policy (10%).

When asked how effective the current ARC-County and Price Loss Coverage (PLC) programs are in providing a financial safety net, 72% of respondents rated the two programs as “somewhat effective” (61%) or “very effective” (11). . %). When asked the same question regarding crop insurance, 84% of respondents rated it as “somewhat effective” (56%) or “very effective” (28%).

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Read the full Ag Economy Barometer report at ag.purdue.edu/commercialag/ageconomybarometer. The site also offers additional resources — such as past reports, charts and survey methodology — and a form to sign up for monthly Barometer email updates and webinars.

Each month, the Purdue Center for Commercial Agriculture Barometer provides a short video analysis of the results. For even more information, check out the Purdue Commercial Eggcast podcast. It includes a detailed breakdown of each month’s barometer, in addition to a discussion of the latest agricultural news affecting farmers.

The AG Economy Barometer, Index of Current Conditions and Index of Future Expectations are available on the Bloomberg Terminal under the following ticker symbols: AGECBARO, AGECCURC and AGECFTEX.



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