Weakening farm income prospects weigh on farmer sentiment
The August Purdue University/CME Group Ag Economy Barometer dropped 13 points to 100, reflecting weakening farm income prospects. The Index of Current Conditions fell 17 points to 83, while the Index of Future Expectations decreased by 11 points to 108. Farmers' primary concerns shifted, with 30% citing lower commodity prices as their main worry, up from 20% last year. The Farm Financial Performance Index reached its lowest level since July 2020, dropping 9 points from July and 14 points year-over-year.
The Farm Capital Investment Index fell 7 points to 31, matching its all-time low. Farmland value expectations also declined, with the Short-Term Farmland Value Expectations Index dropping 13 points to 105. Despite these concerns, 70% of U.S. crop farmers expect farmland cash rental rates for 2025 to remain stable.
Il Barometro dell'Economia Agricola di Purdue University/CME Group di agosto è sceso di 13 punti a 100, riflettendo un indebolimento delle prospettive di reddito agricolo. L'Indice delle Condizioni Correnti è diminuito di 17 punti a 83, mentre l'Indice delle Aspettative Future è calato di 11 punti a 108. Le principali preoccupazioni degli agricoltori sono cambiate, con il 30% che cita i prezzi delle materie prime più bassi come la loro principale preoccupazione, in aumento rispetto al 20% dell'anno scorso. L'Indice delle Performance Finanziarie Agricole ha raggiunto il suo livello più basso da luglio 2020, scendendo di 9 punti rispetto a luglio e di 14 punti rispetto all'anno precedente.
L'Indice di Investimento nel Capitale Agricolo è diminuito di 7 punti a 31, eguagliando il suo minimo storico. Anche le aspettative sul valore dei terreni agricoli sono calate, con l'Indice delle Aspettative sul Valore dei Terreni Agricoli a Breve Termine che è sceso di 13 punti a 105. Nonostante queste preoccupazioni, il 70% degli agricoltori di colture degli Stati Uniti si aspetta che i tassi di affitto dei terreni agricoli per il 2025 rimangano stabili.
El Barómetro de Economía Agrícola de la Universidad de Purdue/CME Group de agosto cayó 13 puntos a 100, reflejando un debilitamiento en las perspectivas de ingresos agrícolas. El Índice de Condiciones Actuales disminuyó 17 puntos a 83, mientras que el Índice de Expectativas Futuras se redujo en 11 puntos a 108. Las principales preocupaciones de los agricultores han cambiado, con un 30% citando los precios más bajos de las materias primas como su principal preocupación, un aumento del 20% respecto al año pasado. El Índice de Rendimiento Financiero Agrícola alcanzó su nivel más bajo desde julio de 2020, cayendo 9 puntos desde julio y 14 puntos interanuales.
El Índice de Inversión en Capital Agrícola disminuyó 7 puntos a 31, igualando su mínimo histórico. Las expectativas sobre el valor de la tierra también cayeron, con el Índice de Expectativas de Valor de la Tierra a Corto Plazo descendiendo 13 puntos a 105. A pesar de estas preocupaciones, el 70% de los agricultores de cultivos de EE. UU. espera que las tasas de alquiler en efectivo de la tierra se mantengan estables en 2025.
퍼듀 대학/CME 그룹의 8월 농업 경제 바롬미터가 13포인트 하락하여 100에 도달하며 농업 소득 전망이 약화되고 있음을 반영합니다. 현재 상황 지수는 17포인트 하락하여 83이 되었고, 미래 기대 지수는 11포인트 하락하여 108이 되었습니다. 농부들의 주요 관심사가 변화했습니다, 30%가 주요 걱정거리로 저렴한 원자재 가격을 들었으며, 이는 작년의 20%에서 증가한 수치입니다. 농업 재무 성과 지수는 2020년 7월 이후 가장 낮은 수준에 도달하며, 7월 대비 9포인트, 지난해 대비 14포인트 하락했습니다.
농업 자본 투자 지수는 7포인트 하락하여 31에 도달하며 사상 최저치를 기록했습니다. 농지 가치 전망도 감소했으며, 단기 농지 가치 기대 지수가 13포인트 하락하여 105가 되었습니다. 이러한 우려에도 불구하고, 미국의 70% 곡물 농부들은 2025년 농지 현금 임대료가 안정적으로 유지될 것으로 기대하고 있습니다.
Le baromètre de l'économie agricole de l'Université Purdue/Groupe CME d'août a chuté de 13 points pour atteindre 100, reflétant un affaiblissement des perspectives de revenus agricoles. L'indice des conditions actuelles a diminué de 17 points à 83, tandis que l'indice des attentes futures a baissé de 11 points à 108. Les principales préoccupations des agriculteurs ont changé, avec 30 % citant des prix des matières premières plus bas comme leur principale inquiétude, contre 20 % l'année dernière. L'indice de performance financière agricole a atteint son niveau le plus bas depuis juillet 2020, chutant de 9 points par rapport à juillet et de 14 points par rapport à l'année dernière.
L'indice d'investissement dans le capital agricole a baissé de 7 points pour atteindre 31, égalant ainsi son niveau le plus bas historique. Les attentes concernant la valeur des terres agricoles ont également diminué, l'indice des attentes à court terme concernant la valeur des terres agricoles ayant chuté de 13 points pour atteindre 105. Malgré ces préoccupations, 70 % des agriculteurs américains s'attendent à ce que les taux de location des terres agricoles restent stables en 2025.
Der Agrarwirtschaftsbarometer der Purdue University/CME Group für August fiel um 13 Punkte auf 100, was auf schwächere Einkommensperspektiven in der Landwirtschaft hinweist. Der Index der aktuellen Bedingungen sank um 17 Punkte auf 83, während der Index der zukünftigen Erwartungen um 11 Punkte auf 108 fiel. Die Hauptsorgen der Landwirte haben sich verschoben, wobei 30 % die niedrigeren Rohstoffpreise als ihre wichtigste Sorge angaben, im Vergleich zu 20 % im letzten Jahr. Der Index der landwirtschaftlichen finanziellen Leistungsfähigkeit erreichte den niedrigsten Stand seit Juli 2020, und sank um 9 Punkte im Vergleich zu Juli und 14 Punkte im Jahresvergleich.
Der Index der Investitionen in landwirtschaftliches Kapital fiel um 7 Punkte auf 31 und erreichte damit den historischen Tiefpunkt. Auch die Erwartungen an den Wert landwirtschaftlicher Flächen gingen zurück, wobei der Index der kurzfristigen Erwartungen an den Wert landwirtschaftlicher Flächen um 13 Punkte auf 105 fiel. Trotz dieser Bedenken erwarten 70 % der US-Ackerbauern, dass die Pachtpreise für landwirtschaftliche Flächen im Jahr 2025 stabil bleiben.
- 68% of respondents expect interest rates to decrease in the coming year
- 70% of U.S. crop farmers anticipate that rental rates will stay the same for the 2025 crop year
- Ag Economy Barometer dropped 13 points to 100, lowest since 2015-2016
- Index of Current Conditions fell 17 points to 83
- Index of Future Expectations decreased by 11 points to 108
- 30% of respondents cite lower commodity prices as primary concern, up from 20% last year
- Farm Financial Performance Index dropped to lowest level since July 2020
- Farm Capital Investment Index fell 7 points to 31, matching all-time low
- Short-Term Farmland Value Expectations Index dropped 13 points to 105
- Percentage of producers expecting farmland values to decline increased from 13% to 24%
Insights
The 13-point drop in the Ag Economy Barometer to 100 signals a significant shift in farmer sentiment, reminiscent of the 2015-2016 farm economy downturn. This decline is primarily driven by weakening farm income prospects and falling crop prices, despite expectations of a bountiful harvest. The 30% of farmers citing lower commodity prices as their main concern, up from 20% last year, underscores the growing anxiety in the agricultural sector.
The Farm Financial Performance Index hitting its lowest point since July 2020 is particularly alarming. This, coupled with the Farm Capital Investment Index matching its all-time low, suggests a potential contraction in agricultural spending and investment. Such a pullback could have ripple effects throughout the rural economy, impacting farm equipment manufacturers, input suppliers and local businesses.
The shifting sentiment in the agricultural sector could have broader economic implications. With 68% of farmers expecting interest rates to decrease, there's a disconnect with current Federal Reserve policy. This optimism might lead to delayed financial decisions, potentially exacerbating economic challenges if rate cuts don't materialize as quickly as anticipated.
The decline in both short-term and long-term farmland value expectations is noteworthy. The Short-Term Farmland Value Expectations Index dropping 41 points from its peak three years ago suggests a potential correction in the farmland market. However, the stability in expected cash rental rates for 2025 (70% anticipating no change) indicates a lag between changing sentiment and actual market adjustments. This disconnect could lead to financial stress for farmers if income doesn't meet rental obligations.
The shift in farmers' primary concerns from input costs to commodity prices is a significant market indicator. This change suggests that supply chain pressures might be easing, but revenue concerns are intensifying. The agricultural sector's pessimism could lead to reduced demand for farm equipment, fertilizers and other agricultural inputs, potentially impacting related industries and stocks.
The 24% of farmers expecting farmland values to decline, up from 13% in July, is a red flag for the rural real estate market. If this sentiment translates into actual price declines, it could affect farm balance sheets and borrowing capacity. However, the divergence between short-term pessimism and relative long-term optimism (as seen in the Long-Term Farmland Value Index at 142) suggests that farmers still see agriculture as viable in the long run, despite current challenges.
"Weakness in the barometer and related indices provide a signal that farmers are concerned about the possibility of extended weakness in farm incomes, similar to what took place from 2015 to 2019," said James Mintert, the barometer's principal investigator and director of Purdue University's Center for Commercial Agriculture.
August's survey results indicate a shift among farmers' primary concerns, with
However, concerns about rising interest rates have lessened, with only
The Farm Financial Performance Index dropped 9 points from July's survey and 14 points from a year ago, reaching its lowest level since July 2020, when there was widespread uncertainty from COVID-related lockdowns. The decline in financial performance reflects ongoing concerns about weak financial conditions. In turn, weakening financial conditions led many farmers to say that now is not a good time to invest, resulting in the Farm Capital Investment Index falling 7 points to 31, matching its all-time low.
"Farmers have also become less optimistic about farmland values this summer than in recent years," said Mintert. "The percentage of farmers who think farmland values could decline within the upcoming year has been rising, which is consistent with the weak outlook for financial conditions. The weak capital investment index reading suggests farmers are going to pull back on capital expenditures."
Respondents' outlook on farmland values faded in August, with the Short-Term Farmland Value Expectations Index dropping 13 points to 105. This marks a 21-point decline from a year ago and a 41-point drop from three years ago, when the index was at its peak. The decrease is attributable to a rise in the percentage of producers expecting farmland values to decline over the next year, increasing from
Despite concerns about weakening farm income, a majority of respondents expect farmland cash rental rates for the 2025 crop year to remain stable. According to this month's survey,
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
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SOURCE CME Group
FAQ
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