Seed World

Decrease in Farmer Sentiment for August

The Purdue University/CME Group Ag Economy Barometer has dipped this August by eight points to a reading of 115 according to a release. This month’s point dip was backed by producers’ current perception of farm conditions. The Index of Current Conditions declined to 108, down 13 points. The survey, conducted Aug. 14 to 18, also noted a decline of five points down to 119 for the Index of Future Expectations .

“Rising interest rates and concerns about high input prices continue to put downward pressure on producer sentiment,” said James Mintert, the barometer’s principal investigator and director of Purdue University’s Center for Commercial Agriculture. “This month over half (60%) of the producers we surveyed said they expect interest rates to rise in the upcoming year.”

Producers biggest concern when asked about the next 12 months is still higher input prices (34% of respondents) followed by rising interest rates (24% of respondents). Crop prices continued to weaken this summer, but only one in five producers (20% of respondents) was highly concerned about declining commodity prices.

The Farm Capital Investment Index fell eight points this month down to 37. This negative view comes from increasing machinery prices and new construction with increasing interest rates. The Farm Financial Conditions Index only declined one point to 86 points.

Producers are still optimistic regarding farmland values, cautiously due to rising interest rates. The Short-Term Farmland Value Expectations Index increased one point up to 126 and the long-term index remained the same at 151. Of the respondents 39% expect farmland values to rise over the next year, but 13% said they expect a decline. From a long-term five-year view regarding farmland values, 63% of respondents are expect value to increase while only 12% expect a decrease in values.

Corn and soybean growers were asked about the discussions they’ve been having regarding the usage of carbon contracts. From the survey about six percent “have engaged in discussions with companies about receiving payments to capture carbon on their farms” but only two percent have signed a contract. Almost half of the farms that were in these contract discussions were offered $10 to $20 per metric ton of carbon captured, but half of those growers did not sign a contract because the payment amount was too low.

The full report can be found at

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