WEST
LAFAYETTE, Ind., Oct. 1, 2024
/PRNewswire/ -- In September, the Purdue
University/CME Group Ag Economy Barometer recorded its
lowest readings since March 2016.
Declining income expectations pushed farmer sentiment down as the
barometer fell 12 points to 88, and the Index of Future
Expectations dropped 14 points to 94. The Index of Current
Conditions also fell 7 points to 76, which nearly matched levels
seen in April 2020, during the height
of COVID-19 concerns for farmers. This month's survey was conducted
from Sept. 9-13, 2024.
September's survey revealed that farmers are increasingly
worried about commodity prices, input costs, agricultural trade
prospects and the potential impact of the upcoming election on
their farm operations. When asked to identify their top concerns
for the coming year, low commodity prices and high input costs were
nearly tied, with 34% of farmers citing input prices and 33%
pointing to lower output prices as their primary concerns. Interest
rates trailed behind as a top concern for 17% of respondents.
Producers' apprehensions about commodity prices matched up with
their lack of confidence in the future of U.S. agricultural
exports; only 26% of respondents expect exports to rise over the
next five years, the most pessimistic response to this question
since it was first introduced in 2019. Additionally, 78% of
producers expressed concern that government policy changes
following the fall 2024 elections could impact their farms.
"The continued drop in the barometer reflects deepening concerns
among farmers regarding expectations for farm income in 2024 and
2025," said James Mintert, the
barometer's principal investigator and director of Purdue University's Center for Commercial
Agriculture. "It's notable that producer sentiment dropped back to
levels last seen in 2016 when the U.S. farm economy was in the
early stages of an economic downturn. In addition to commodity
prices and input costs weighing heavily on their operations,
producers are also facing considerable uncertainty about what lies
ahead for their farms with the possible government policy changes
following the upcoming 2024 elections."
The Farm Financial Performance Index fell for the third
consecutive month, dropping to 68 in September from 72 in August.
Farmers' financial expectations have declined markedly compared to
a year ago, as the index was at 86 in September 2023 — an 18-point difference. While
the Farm Capital Investment Index increased by 4 points from August
to a reading of 35, it sits just above its all-time low, indicating
that many producers believe it is not an opportune time for making
large investments.
The Short-Term Farmland Value Expectations Index dropped by 10
points to 95. This is the first time since 2020 that the index fell
below 100, indicating that more farmers are expecting a decline in
farmland values over the next year than those who anticipate an
increase. This month's shift from a positive to a weaker outlook is
attributable to a significant decrease in the percentage of
producers forecasting rising values and a rise in those who expect
values to remain steady.
The September survey marks the fourth consecutive year that the
barometer has included questions regarding cover crop usage among
corn and soybean producers. Consistent with prior years' surveys,
more than half of the respondents indicated that they currently
plant cover crops on part of their farms, while an additional 1 in
5 farmers reported planting cover crops sometime in the past.
Interestingly, farmers who currently use cover crops say they are
devoting a larger proportion of their farm's acreage to cover crops
than in the past. In 2021, 41% of cover crop users noted planting
them on more than 25% of their farm's acreage. This figure rose to
50% in 2023, and in this year's survey, 68% of cover crop users
indicated planting cover crops on more than one-fourth of their
farms.
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 markets,
optimize portfolios, and analyze data — empowering market
participants worldwide to efficiently manage risk and capture
opportunities. CME Group exchanges offer the widest range of global
benchmark products across all major asset classes based on interest
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
central counterparty clearing providers, CME Clearing.
CME Group, the Globe logo, CME, Chicago Mercantile Exchange,
Globex, and E-mini are trademarks of Chicago Mercantile Exchange
Inc. CBOT and Chicago Board of
Trade are trademarks of Board of Trade of the City of Chicago, Inc. NYMEX, New York
Mercantile Exchange and ClearPort are trademarks of New York
Mercantile Exchange, Inc. COMEX is a trademark of Commodity
Exchange, Inc. BrokerTec is a trademark of BrokerTec Americas LLC
and EBS is a trademark of EBS Group LTD. The S&P 500 Index is a
product of S&P Dow Jones Indices LLC ("S&P DJI").
"S&P®", "S&P 500®", "SPY®", "SPX®", US 500 and
The 500 are trademarks of Standard & Poor's Financial Services
LLC; Dow Jones®, DJIA® and Dow Jones Industrial Average are service
and/or trademarks of Dow Jones Trademark Holdings LLC. These
trademarks have been licensed for use by Chicago Mercantile
Exchange Inc. Futures contracts based on the S&P 500 Index are
not sponsored, endorsed, marketed, or promoted by S&P DJI, and
S&P DJI makes no representation regarding the advisability of
investing in such products. All other trademarks are the property
of their respective owners.
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 Mitch Daniels 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 Caption: Farmer sentiment reaches lowest levels since 2016
as income expectations weaken. (Purdue/CME Group Ag Economy Barometer/James Mintert)
CME-G
View original
content:https://www.prnewswire.com/news-releases/farmer-sentiment-reaches-lowest-levels-since-2016-as-income-expectations-weaken-302263966.html
SOURCE CME Group