WEST
LAFAYETTE, Ind., Feb. 6, 2024
/PRNewswire/ -- The most recent findings from the Purdue University/CME Group Ag Economy Barometer
reveal a downturn in farmer sentiment at the start of 2024.
The January barometer fell to a reading of 106, 8 points lower
than in December. Producers expressed a more pessimistic
perspective about their farms' current situation and future
prospects. The Current Conditions Index fell 9 points, and the
Future Expectations Index dropped by 7, both compared to December.
The anticipation of weaker farm income in 2024 contributed to the
overall decline, reflected in the Farm Financial Performance Index
at 85, a 12-point decrease from the previous month. This month's Ag
Economy Barometer survey was conducted from Jan. 15-19.
"The number of producers pointing to lower commodity prices and
lower farm income in 2024 significantly influenced the decline
across all indices," said James
Mintert, the barometer's principal investigator and director
of Purdue University's Center for
Commercial Agriculture.
There was an increase in the proportion of producers
anticipating a decline in financial performance for the upcoming
year, with the figure rising from 20% in December to 31% in
January. Concurrently, the percentage of those expecting income
levels to remain stable decreased from 63% to 53%.
"For the first time, the percentage of producers choosing lower
commodity prices as a top concern matched the percentage of
producers who chose higher input costs. This alignment indicates
that U.S. farmers are worried about a possible cost/price squeeze
leading to lower farm incomes," Mintert said.
The Farm Capital Investment Index fell to 35, 8 points lower
than in December. This month, a shift occurred as fewer producers
attributed their hesitation to make large investments to rising
interest rates, which reversed a trend observed through much of
2023. Instead, more farmers cited high machinery and construction
prices as reasons to defer investments. Meanwhile, among those
deeming it a favorable time for large investments, an increased
number pointed to expansion opportunities, while fewer referenced
the rise in dealers' farm machinery inventories as a motivating
factor for investment.
This year, a greater number of producers expect their operating
loan size to remain steady compared to last year, with fewer
anticipating a larger loan. Of those expecting an increase, 61%
cite rising input costs, down from 80% last year, while 23%
attribute it to farm expansion, up from 15% in 2023.
While the Short-Term Farmland Value Expectations Index declined
to 115, indicating reduced optimism on the part of producers, the
long-term index held steady at 150, suggesting enduring optimism.
Notably, the proportion of producers anticipating a decline in
farmland values for the upcoming year rose to 16%, up from 10% just
three months ago, with a simultaneous drop in those expecting
higher values from 35% to 31%.
Additionally, the January survey reveals a consistent interest
in carbon capture, as 8% of respondents reported engaging in
discussions about carbon contracts. Among those, 61% were offered
payment rates below $10 per metric
ton, and 12% were offered a rate of $30 or more per ton.
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.
About CME Group
As the world's leading derivatives
marketplace, CME Group enables clients to trade futures, options,
cash and OTC markets, optimize portfolios, and analyze data —
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, equity indexes, foreign exchange, energy,
agricultural products and metals. The company offers futures and
options on futures trading through the CME Globex platform, fixed
income trading via BrokerTec and foreign exchange trading on the
EBS platform. In addition, it operates one of the world's leading
central counterparty clearing providers, CME Clearing.
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 ("S&P DJI").
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respective owners.
About Purdue
University
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's main campus has frozen tuition 13 years in
a row. See how Purdue never stops in
the persistent pursuit of the next giant leap — including its first
comprehensive urban campus in Indianapolis, the new Mitchell E. Daniels, Jr.
School of Business, and Purdue Computes —
at https://www.purdue.edu/president/strategic-initiatives.
Writer: Erin Robinson,
erobin@purdue.edu
Source : James Mintert,
765-494-7004, jmintert@purdue.edu
Image URL:
https://www.purdue.edu/uns/images/2024/agbarometer-24janLO.jpg
Image Caption:
Weakened commodity prices cast a shadow on farmer sentiment.
(Purdue/CME Group Ag Economy
Barometer/James Mintert)
CME-G
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SOURCE CME Group