The September Purdue University/CME Group Ag Economy Barometer reached its lowest readings since March 2016. Declining income expectations pushed farmer sentiment down as the barometer fell to 88, and the Index of Future Expectations dropped 14 points to 94. The Index of Current Conditions also fell seven points to 76, nearly matching levels seen in April 2020, during the height of COVID.
September’s survey revealed that farmers are increasingly worried about commodity prices, input costs, agricultural trade prospects, and the potential impact of the upcoming election on their farm operations. The top concerns for survey respondents include 34 percent saying high input costs were their chief worry. Also, 33 percent pointed to lower output prices as their number one worry. Only 26 percent of all the survey respondents expect agricultural exports to rise during the next five years, the most pessimistic response to the question since it began in 2019.
(From the National Association of Farm Broadcasters)
Farmer Sentiment Reaches Lowest Levels Since 2016 as Income Expectations Weaken
October 1, 2024
James Mintert and Michael Langemeier, Purdue Center for Commercial Agriculture
Declining income expectations helped to push farmer sentiment down again in September as the Purdue University-CME Group Ag Economy Barometer Index fell 12 points to 88. Both of the barometer’s sub-indices, the Index of Current Conditions and the Index of Future Expectations, declined as well. The Current Conditions Index fell 7 points to 76, and the Future Expectations Index dropped 14 points to 94. These were the weakest barometer and future expectations readings since March 2016, when the farm economy was in the throes of an economic downturn. The current conditions assessment very nearly matched that of April 2020, when COVID concerns were top of mind for U.S. farmers. Weak output prices combined with high input costs were key problems cited by survey respondents in September. The September survey took place from September 9-13, 2024.
Farmers are concerned about commodity prices, input costs, the future of agricultural trade and how the upcoming election could affect their farm operations. When asked specifically about their biggest concerns for the upcoming year, low commodity prices and high input costs were locked in a virtual dead heat in September as the top 2 concerns for the upcoming year. Thirty-four percent of farmers in the survey chose input prices as a top concern, while 33% chose lower output prices as their biggest concern. Trailing output and input prices as a key concern among producers was interest rates, selected by 17% of respondents. Producers’ concerns about commodity prices was backed up by their lack of confidence in the future of U.S. agricultural exports. This month, just 26% of respondents reported that they expect U.S. agricultural exports to rise over the next five years. Dating back to 2019, when this question was first posed, this was the least optimistic perspective offered by farmers regarding agricultural exports in a barometer survey. In a related question, 78% of producers in this month’s survey also said they are concerned that following the fall 2024 elections, there will be government policy changes that affect their farms.
The Farm Financial Performance Index declined for the third month in a row, dipping to 68 in September, down from 72 in August. Farmers’s financial expectations are markedly weaker than a year ago at this time as the index in …..
Read the full September report.