Farmer sentiment improves despite financial performance concerns
The Purdue University/CME Group Ag Economy Barometer index rose 8 points to 113 in July, with improvements in both current conditions and future expectations. Despite declines in corn and soybean prices, farmer sentiment improved. High input costs remained the top concern for 34% of farmers, followed by the risk of lower crop and livestock prices at 29%.
The Farm Financial Performance Index dropped 4 points to 81, reflecting worries about weakening commodity prices and high input costs. However, the Farm Capital Investment Index rose 6 points to 38, indicating a slight decrease in pessimism about large investments. Farmland value expectations showed mixed results, with short-term expectations improving slightly and long-term expectations declining.
L'indice Ag Economy Barometer della Purdue University/CME Group è aumentato di 8 punti, raggiungendo 113 a luglio, con miglioramenti sia nelle condizioni attuali che nelle aspettative future. Nonostante il calo dei prezzi di mais e soia, il sentimento dei coltivatori è migliorato. Alti costi di input sono rimasti la principale preoccupazione per il 34% degli agricoltori, seguita dal rischio di prezzi inferiori per le colture e il bestiame al 29%.
L'Indice delle Prestazioni Finanziarie delle Aziende Agricole è diminuito di 4 punti, portandosi a 81, riflettendo le preoccupazioni riguardo al calo dei prezzi delle materie prime e agli alti costi di input. Tuttavia, l'Indice degli Investimenti di Capitale Agricolo è aumentato di 6 punti, raggiungendo 38, indicando una leggera diminuzione del pessimismo riguardante i grandi investimenti. Le aspettative sul valore delle terre agricole hanno mostrato risultati misti, con le aspettative a breve termine che sono migliorate leggermente e quelle a lungo termine in calo.
El índice Ag Economy Barometer de la Purdue University/CME Group aumentó 8 puntos a 113 en julio, con mejoras tanto en las condiciones actuales como en las expectativas futuras. A pesar de la caída de los precios del maíz y la soja, el sentimiento de los agricultores mejoró. Altos costos de insumos siguieron siendo la principal preocupación para el 34% de los agricultores, seguido del riesgo de precios más bajos de cultivos y ganado, con un 29%.
El Índice de Desempeño Financiero de las Granjas cayó 4 puntos a 81, reflejando preocupaciones por el debilitamiento de los precios de las materias primas y los altos costos de insumos. Sin embargo, el Índice de Inversión de Capital Agrícola aumentó 6 puntos a 38, lo que indica una ligera disminución en el pesimismo sobre grandes inversiones. Las expectativas sobre el valor de la tierra mostraron resultados mixtos, con expectativas a corto plazo que mejoraron ligeramente y expectativas a largo plazo en declive.
Purdue University/CME Group의 농업 경제 바 로미터 지수가 7월에 8포인트 상승하여 113에 도달했으며, 현재 상황과 미래 기대치 모두에서 개선이 있었습니다. 옥수수와 대두 가격의 하락에도 불구하고 농부들의 여론은 개선되었습니다. 높은 투입 비용은 34%의 농부들이 가장 큰 걱정거리로 꼽았고, 그 뒤를 이어 29%가 작물과 가축 가격 하락의 위험을 우려했습니다.
농장 재무 성과 지수는 4포인트 하락하여 81을 기록했으며, 이는 원자재 가격 약세와 높은 투입 비용에 대한 우려를 반영합니다. 그러나 농장 자본 투자 지수는 6포인트 상승하여 38에 이를 정도로 대규모 투자에 대한 비관감이 약간 줄어들었음을 나타냅니다. 농지 가치 기대치는 엇갈린 결과를 보였으며, 단기 기대치는 약간 개선되었고 장기 기대치는 하락했습니다.
L'indice Ag Economy Barometer de la Purdue University/CME Group a augmenté de 8 points pour atteindre 113 en juillet, avec des améliorations tant des conditions actuelles que des attentes futures. Malgré la baisse des prix du maïs et du soja, le moral des agriculteurs s'est amélioré. Des coûts d'intrants élevés demeurent la principale préoccupation pour 34% des agriculteurs, suivis par le risque de baisse des prix des cultures et du bétail, qui atteint 29%.
L'Indice de Performance Financière des Exploitations Agricoles a chuté de 4 points pour atteindre 81, reflétant des inquiétudes concernant l'affaiblissement des prix des matières premières et les coûts d'intrants élevés. Cependant, l'Indice d'Investissement en Capital Agricole a augmenté de 6 points pour atteindre 38, indiquant une légère diminution du pessimisme concernant les investissements importants. Les attentes concernant la valeur des terres agricoles ont montré des résultats mitigés, avec des attentes à court terme s'améliorant légèrement et des attentes à long terme en déclin.
Der Ag Economy Barometer Index der Purdue University/CME Group stieg im Juli um 8 Punkte auf 113, wobei sowohl die aktuellen Bedingungen als auch die zukünftigen Erwartungen verbessert wurden. Trotz des Rückgangs der Preise für Mais und Sojabohnen verbesserte sich die Stimmung der Landwirte. Hohe Inputkosten blieben die größte Sorge für 34% der Landwirte, gefolgt von der Gefahr sinkender Preise für Erzeugnisse und Vieh mit 29%.
Der Index für die finanzielle Leistung der Landwirtschaft fiel um 4 Punkte auf 81, was die Sorgen über sinkende Rohstoffpreise und hohe Inputkosten widerspiegelt. Der Kapitalinvestitionsindex der Landwirtschaft stieg jedoch um 6 Punkte auf 38, was auf eine leichte Abnahme des Pessimismus hinsichtlich großer Investitionen hindeutet. Die Erwartungen an den Wert landwirtschaftlicher Flächen zeigten gemischte Ergebnisse, wobei sich die kurzfristigen Erwartungen leicht verbesserten und die langfristigen Erwartungen rückläufig waren.
- Ag Economy Barometer index rose 8 points to 113
- Farm Capital Investment Index increased by 6 points to 38
- Short-Term Farmland Value Expectations Index improved slightly to 118
- Farm Financial Performance Index dropped 4 points to 81
- Declines in corn and soybean prices (11% and 5% respectively)
- Long-Term Farmland Value Expectations Index decreased by 6 points to 146
- 72% of crop farmers expect cash rental rates to remain unchanged for 2025
Insights
The improvement in farmer sentiment despite financial performance concerns presents an intriguing paradox. While the Ag Economy Barometer rose 8 points to 113, the Farm Financial Performance Index dropped 4 points to 81. This divergence suggests farmers are cautiously optimistic about the future, even as they face immediate challenges.
The decline in corn and soybean prices (11% and 5% respectively) coupled with persistently high input costs points to a potential cost-price squeeze for crop producers. This could lead to reduced profitability and potentially impact farm equipment manufacturers and agricultural input suppliers in the short term.
The slight improvement in the Farm Capital Investment Index to 38, while still weak, indicates a marginal increase in willingness to make large investments. This could provide a modest boost to farm equipment manufacturers, but the overall sentiment remains cautious.
The survey reveals shifting priorities among farmers. High input costs remain the top concern for 34% of farmers, while 29% worry about lower crop and livestock prices. This indicates a continued focus on cost management and risk mitigation strategies.
Interestingly, only 17% cited rising interest rates as a top concern, down from 23% last month. This aligns with signals from the Federal Reserve about interest rates peaking, potentially easing pressure on farm financing costs.
The farmland value expectations present a mixed picture. The short-term outlook improved slightly, but the long-term expectations declined. This could impact land-based investments and agricultural REITs. The majority expectation (72%) of stable cash rental rates for 2025 suggests a period of relative stability in farm operating costs, which could benefit both landowners and tenants.
The July survey showed that high input costs remained the biggest concern for
The Farm Financial Performance Index dropped 4 points in July to 81, 6 points lower than in July 2023. The decline in financial performance expectations reflected farmers' worries about weakening commodity prices and high input costs following improvements in the May and June indices. Although production costs for principal crops, including corn and soybeans, have decreased year over year, output prices have also fallen, raising the possibility of a cost-price squeeze for
Despite concerns about farms' financial performance, the Farm Capital Investment Index rose 6 points in July to 38, though it remains weak, at 7 points lower than in July 2023. This improvement was due to a slight decrease in the number of producers who believe it's a bad time to make large investments, which dropped from
"Declines in crop prices point to lower producer incomes this year, so the increase in optimism was somewhat puzzling," said James Mintert, the barometer's principal investigator and director of Purdue University's Center for Commercial Agriculture. "Fewer producers citing rising interest rates as a primary concern for the upcoming year corresponds with the modest improvement in their perspectives on capital investments, but respondents continue to express hesitancy to make large investments."
July saw a small improvement in the Short-Term Farmland Value Expectations Index, rising to 118 from 115 in June. This was driven by more respondents expecting stable farmland values over the next year. At the same time, the Long-Term Farmland Value Expectations Index dropped 6 points from June to 146, with fewer farmers expecting values to rise over the next five years and more anticipating they will remain unchanged.
As nationwide discussions begin for the 2025 crop year's farmland leases, the July survey revealed that nearly three-fourths (
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.
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About Purdue University
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Writer: Morgan French, mmfrench@purdue.edu
Source: James Mintert, 765-494-7004, jmintert@purdue.edu
Image URL: https://www.purdue.edu/uns/images/2024/Agbarometer0724-LO.jpg
Image Caption:
Farmer sentiment improves despite financial performance concerns. (Purdue/CME Group Ag Economy Barometer/James Mintert)
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SOURCE CME Group
FAQ
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