|
 The
Index of Current Conditions fell 13 points to a reading of 108.
The Index of Future Expectations also declined 5 points in
August to a reading of 119. This month’s Ag Economy Barometer
survey was conducted from August 14-18.
“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.”
When asked about their top concerns for their farming operations
in the next 12 months, producers continue to point to higher
input prices (34% of respondents) and rising interest rates (24%
of respondents). Even though crop prices weakened significantly
this summer, only one in five producers (20% of respondents)
chose declining commodity prices as one of their top concerns.
The Farm Capital Investment Index was lower this month, falling
8 points to a reading of 37. Increasing prices for farm
machinery and new construction along with rising interest rates
continue to be the two most commonly cited reasons for their
negative view. Meanwhile, producers’ rating of farm financial
conditions changed little in August, as the Farm Financial
Conditions Index declined just one point to a reading of 86.
Despite increasing concerns about rising interest rates,
producers remain cautiously optimistic about farmland values.
The Short-Term Farmland Value Expectations Index rose one point
to 126, while the long-term index was unchanged at a reading of
151. About 4 out of 10 (39%) respondents said they expect
farmland values to rise over the next year, while 13% said they
look for values to decline in the next year. When asked about
their longer-term view of farmland values, more than 6 out of 10
(63%) respondents said they expect values to rise over the next
five years, while 12% said they expect values to fall.
To better understand the usage of carbon contracts in row-crop
agriculture, corn and soybean growers were asked about the types
of conversations they have had with those companies. In the
August survey, 6% of corn and soybean growers said they have
engaged in discussions with companies about receiving payments
to capture carbon on their farms, while just 2% said they had
signed a carbon contract. Nearly half (47%) of the farms who
discussed contract terms with a company said they were offered a
payment rate of $10 to $20 per metric ton of carbon captured.
Among the farms who engaged in discussions but chose not to sign
a carbon contract, half said it was because the payment level
was too low.
Read the full Ag Economy Barometer report at
https://purdue.ag/agbarometer. 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 provides a short video analysis of the barometer
results, available at
https://purdue.ag/
barometervideo.
For more information, check out the Purdue Commercial AgCast
podcast available at https://
purdue.ag/agcast,
which includes a detailed breakdown of each month’s barometer
and a discussion of recent agricultural news that affects
farmers.
[to top of second column] |
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.
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
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[Writer: Kami Goodwin
Source: James Mintert]
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