march

Farmer Sentiment Improves in March

Dan Economy

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Courtesy of Purdue University/CME Group

The Purdue University/CME Group Ag Economy Barometer shows an improved outlook for U.S. farmers during March. The index rose to 114, a three-point increase over February.

While the Index of Current Conditions fell by two points to 101, the Index of Future Expectations climbed to 120, up by five points compared to February. The disparity between the two was primarily attributable to farmers’ perceptions that a financial downturn took place over the past year, coupled with expectations for some improvement over the next 12 months. Producers’ expectations for interest rate changes have shifted, which could help explain why producers look for financial conditions to improve.

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In March, 48 percent of respondents said they expect a decline in the U.S. prime interest rate over the next year. That’s up from 35 percent in December. High input costs continue to be the number one concern, with 36 percent of producers expressing worry.

(From the National Association of Farm Broadcasters)

Farmer Sentiment Improves As Interest Rate Expectations Shift

April 2, 2024

James Mintert and Michael Langemeier, Purdue Center for Commercial Agriculture

U.S. farmers’ perspective on the future improved in March helping to push the Purdue University-CME Group Ag Economy Barometer up 3 points from February to a reading of 114. The Index of Current Conditions at 101 was 2 points below a month earlier while the Index of Future Expectations reached 120, 5 points higher than in February. The split between the current and future indices was driven primarily by farmers’ perception that their financial condition has deteriorated over the last year while they expect their financial situation to improve modestly in the next 12 months. The March Ag Economy Barometer survey was conducted from March 11-15, 2024.

Figure 1. Purdue/CME Group Ag Economy Barometer, October 2015-March 2024.
Figure 2. Indices of Current Conditions and Future Expectations, October 2015-March 2024.
Figure 3. Farm Financial Performance Index, April 2018-March 2024.

Producers’ expectations for interest rates have shifted which could help explain why producers look for financial conditions to improve. This month nearly one-half (48%) of respondents said they look for the U.S. prime interest rate to decline over the next year. That’s up from 35% of farmers who said they expect rates to decline the last time this question was posed in December 2023. And just one-third (32%) of respondents in March said they expect interest rates to increase in the next 12 months compared to 43% of respondents who were looking for rates to rise in the upcoming year when polled in December. Just 20% of respondents this month said the risk of rising interest rates was a top concern, down from 24% who chose it as a top concern in December. Producers remain focused on high input costs as their number one concern, chosen by 36% of respondents in this month’s survey.

Figure 4. Biggest Concerns for Your Farming Operation, January 2023-March 2024.

The Farm Capital Investment Index rose 7 points in March to a reading of 41 as the percentage of producers who said it’s a good time for large investment rose to 15%, up from 11% in the last 2 months. Among producers who said it’s a good time for ……

Read the full March 2024 report “Farmer Sentiment Improves As Interest Rate Expectations Shift” here (.pdf).