{"id":9112,"date":"2024-09-03T09:50:37","date_gmt":"2024-09-03T13:50:37","guid":{"rendered":"https:\/\/www.purdue.edu\/newsroom\/?p=9112"},"modified":"2024-09-03T09:51:43","modified_gmt":"2024-09-03T13:51:43","slug":"weakening-farm-income-prospects-weigh-on-farmer-sentiment","status":"publish","type":"post","link":"https:\/\/www.purdue.edu\/newsroom\/2024\/Q3\/weakening-farm-income-prospects-weigh-on-farmer-sentiment","title":{"rendered":"Weakening farm income prospects weigh on farmer sentiment"},"content":{"rendered":"\n

WEST LAFAYETTE, Ind. \u2014 The August Purdue University\/CME Group Ag Economy Barometer<\/a> dropped 13 points from July to a reading of 100, echoing levels seen from fall 2015 to winter 2016 during the early stages of a significant downturn in the U.S. farm economy. The Index of Current Conditions also dropped 17 points to 83, while the Index of Future Expectations decreased by 11 points to 108. Weakening farm income prospects weighed on farmers\u2019 sentiment as the outlook for a bountiful fall harvest was more than offset by declining crop prices. This month\u2019s survey was conducted from Aug. 12-16, 2024.<\/p>\n\n\n\n

\u201cWeakness 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,\u201d said James Mintert<\/a>, the barometer\u2019s principal investigator and director of Purdue University\u2019s Center for Commercial Agriculture<\/a>.<\/p>\n\n\n\n

August\u2019s survey results indicate a shift among farmers\u2019 primary concerns, with 30% of respondents identifying lower commodity prices as their primary concern, compared to 33% who cited high input costs. Last year at this time only 20% pointed to weak commodity prices as a top concern.<\/p>\n\n\n\n

However, concerns about rising interest rates have lessened, with only 17% of farmers mentioning this issue, down from 24% last year. Looking ahead, 68% of respondents expect interest rates to decrease in the coming year, while just 19% anticipate an increase.<\/p>\n\n\n\n

The Farm Financial Performance Index dropped 9 points from July\u2019s 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.<\/p>\n\n\n\n

\u201cFarmers have also become less optimistic about farmland values this summer than in recent years,\u201d said Mintert. \u201cThe 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.\u201d<\/p>\n\n\n\n

Respondents\u2019 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 13% in July to 24% in August. The Long-Term Farmland Value Index also fell, dropping 4 points to 142.<\/p>\n\n\n\n

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\u2019s survey, 70% of U.S. crop farmers anticipate that rental rates will stay the same, while only 16% expect a decline in lease rates.<\/p>\n\n\n\n

About the Purdue University Center for Commercial Agriculture<\/strong><\/h2>\n\n\n\n

The Center for Commercial Agriculture<\/a> was founded in 2011 to provide professional development and educational programs for farmers. Housed within Purdue University\u2019s Department of Agricultural Economics, the center\u2019s faculty and staff develop and execute research and educational programs that address the different needs of managing in today\u2019s business environment.<\/p>\n\n\n\n

About CME Group<\/strong><\/h2>\n\n\n\n

As the world\u2019s leading derivatives marketplace, CME Group<\/a> enables clients to trade futures, options, cash and OTC markets, optimize portfolios, and analyze data \u2014 empowering market participants worldwide to efficiently manage risk and capture opportunities. CME Group exchanges offer the widest range of global benchmark products across all major asset classes based on interest rates<\/a>, equity indexes<\/a>, foreign exchange<\/a>, energy<\/a>, agricultural products<\/a> and metals<\/a>. The company offers futures and options on futures trading through the CME Globex<\/a> platform, fixed income trading via BrokerTec and foreign exchange trading on the EBS platform. In addition, it operates one of the world\u2019s leading central counterparty clearing providers, CME Clearing.<\/p>\n\n\n\n

<\/a>CME Group, the Globe logo, CME, Chicago Mercantile Exchange, Globex, and E-mini are trademarks of Chicago Mercantile Exchange Inc. CBOT and Chicago Board of Trade are trademarks of Board of Trade of the City of Chicago, Inc. NYMEX, New York Mercantile Exchange and ClearPort are trademarks of New York Mercantile Exchange, Inc. COMEX is a trademark of Commodity Exchange, Inc. BrokerTec is a trademark of BrokerTec Americas LLC and EBS is a trademark of EBS Group LTD. The S&P 500 Index is a product of S&P Dow Jones Indices LLC (\u201cS&P DJI\u201d). \u201cS&P\u00ae\u201d, \u201cS&P 500\u00ae\u201d, \u201cSPY\u00ae\u201d, \u201cSPX\u00ae\u201d, US 500 and The 500 are trademarks of Standard & Poor\u2019s Financial Services LLC; Dow Jones\u00ae, DJIA\u00ae and Dow Jones Industrial Average are service and\/or trademarks of Dow Jones Trademark Holdings LLC. These trademarks have been licensed for use by Chicago Mercantile Exchange Inc. Futures contracts based on the S&P 500 Index are not sponsored, endorsed, marketed, or promoted by S&P DJI, and S&P DJI makes no representation regarding the advisability of investing in such products. All other trademarks are the property of their respective owners.<\/p>\n\n\n\n

About Purdue University<\/strong><\/h2>\n\n\n\n

Purdue University is a public research institution demonstrating excellence at scale. Ranked among top 10 public universities and with two colleges in the top four in the United States, Purdue discovers and disseminates knowledge with a quality and at a scale second to none. More than 105,000 students study at Purdue across modalities and locations, including nearly 50,000 in person on the West Lafayette campus. Committed to affordability and accessibility, Purdue\u2019s main campus has frozen tuition 13 years in a row. See how Purdue never stops in the persistent pursuit of the next giant leap \u2014 including its first comprehensive urban campus in Indianapolis, the Mitch Daniels School of Business, Purdue Computes and the One Health initiative \u2014 at https:\/\/www.purdue.edu\/president\/strategic-initiatives<\/a><\/p>\n\n\n

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\n Source:<\/strong> James Mintert, 765-494-7004, jmintert@purdue.edu<\/a>
\u00a0
Media contacts:<\/strong>
Aissa Good, Purdue University, 765-496-3884, aissa@purdue.edu<\/a>
Dana Schmidt, CME Group, 312-872-5443,\u00a0dana.schmidt@cmegroup.com<\/a>

Agricultural Communications:<\/strong>\u00a0Maureen Manier,\u00a0mmanier@purdue.edu<\/a>,\u00a0765-494-8415<\/a> <\/p>\n <\/div>\n <\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

WEST LAFAYETTE, Ind. \u2014 The August Purdue University\/CME Group Ag Economy Barometer dropped 13 points from July to a reading of 100, echoing levels seen from fall 2015 to winter 2016 during the early stages of a significant downturn in<\/p>\n","protected":false},"author":25,"featured_media":9092,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[19,7],"tags":[],"department":[6],"source":[29],"purdue_today_topic":[],"coauthors":[306],"class_list":["post-9112","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-general","category-research-excellence","department-agriculture","source-purdue-news"],"acf":[],"_links":{"self":[{"href":"https:\/\/www.purdue.edu\/newsroom\/wp-json\/wp\/v2\/posts\/9112","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.purdue.edu\/newsroom\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.purdue.edu\/newsroom\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.purdue.edu\/newsroom\/wp-json\/wp\/v2\/users\/25"}],"replies":[{"embeddable":true,"href":"https:\/\/www.purdue.edu\/newsroom\/wp-json\/wp\/v2\/comments?post=9112"}],"version-history":[{"count":3,"href":"https:\/\/www.purdue.edu\/newsroom\/wp-json\/wp\/v2\/posts\/9112\/revisions"}],"predecessor-version":[{"id":9116,"href":"https:\/\/www.purdue.edu\/newsroom\/wp-json\/wp\/v2\/posts\/9112\/revisions\/9116"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.purdue.edu\/newsroom\/wp-json\/wp\/v2\/media\/9092"}],"wp:attachment":[{"href":"https:\/\/www.purdue.edu\/newsroom\/wp-json\/wp\/v2\/media?parent=9112"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.purdue.edu\/newsroom\/wp-json\/wp\/v2\/categories?post=9112"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.purdue.edu\/newsroom\/wp-json\/wp\/v2\/tags?post=9112"},{"taxonomy":"department","embeddable":true,"href":"https:\/\/www.purdue.edu\/newsroom\/wp-json\/wp\/v2\/department?post=9112"},{"taxonomy":"source","embeddable":true,"href":"https:\/\/www.purdue.edu\/newsroom\/wp-json\/wp\/v2\/source?post=9112"},{"taxonomy":"purdue_today_topic","embeddable":true,"href":"https:\/\/www.purdue.edu\/newsroom\/wp-json\/wp\/v2\/purdue_today_topic?post=9112"},{"taxonomy":"author","embeddable":true,"href":"https:\/\/www.purdue.edu\/newsroom\/wp-json\/wp\/v2\/coauthors?post=9112"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}