Weakening crop prices, high production costs weigh on farmer sentiment
Farmers’ sentiment for the second month in a row during September as the Purdue University-CME Group Ag Economy Barometer fell 9 points to a reading of 106. That was 6 points (5.4%) below last year. Producers expressed concern about both their current situation as well as future prospects for their farms. The Current Conditions and Future Expectations Indices both declined 10 points in September with reading of 98 and 109, respectively.
Worries about the risk of declining prices for crops and livestock along with ongoing concerns about high input costs and interest rates weighed on producer sentiment. Despite the weak sentiment reading, producers remain relatively optimistic about farmland values as expressed by both the short- and long-term farmland values indices.
The survey noted, “The relative optimism about farmland values expressed by producers is somewhat surprising given concerns expressed about high input costs, rising interest rates and the risk of lower crop and or livestock prices. Respondents who expect farmland values to rise over the next five years continue to point to non-farm investor demand for farmland along with inflation as the top two reasons for farmland values to continue rising.”
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