WEST
LAFAYETTE, Ind., Nov. 7, 2023
/PRNewswire/ -- There was a slight uptick in agricultural
producers' sentiment in October, as the Purdue
University/CME Group Ag Economy Barometer index rose 4
points to a reading of 110. The modest improvement in farmer
sentiment resulted from farmers' improved perspective on current
conditions on their farms as well as their expectations for the
future. The Index of Current Conditions rose 3 points to 101
while the Index of Future Expectations rose 5 points to 114.
This month's Ag Economy Barometer survey was conducted from
October 16-20, 2023.
"Farmers in this month's survey were slightly less concerned
about the risk of lower prices for crops and livestock and felt
somewhat better about their farms' financial situation than a month
earlier," said James Mintert, the
barometer's principal investigator and director of Purdue University's Center for Commercial
Agriculture.
Farmers' more optimistic view of their farms' financial
situation was reflected in the Farm Financial Performance
Index, which rose 6 points in October compared to September.
This month's index value of 92 was the highest farm financial
performance reading since April and pushed the index 7% above its
reading from a year ago. The index's rise stood in contrast to
USDA's' forecast for 2023 net farm income to fall below 2022's
income level.
"Reports of higher-than-expected corn and soybean yields in some
Corn Belt locations, along with a modest rally in corn prices,
likely contributed to this month's rise in the financial conditions
and the barometer indices," said Mintert.
Despite the perception that financial conditions were stronger
than a month earlier, the Farm Capital Investment Index fell
4 points in October to a reading of 35. This was the lowest reading
of the year for the investment index. In October, nearly 8 out of
10 (78%) respondents said it was a bad time to make large
investments in their farm operation, while just 13% of farmers said
it was a good time to make large investments. Among those who said
it's a bad time to invest, the most commonly cited reason was
rising interest rates, chosen by 41% of respondents, up one point
from September. Of those who said it is a good time to make large
investments in their farm operation, 24% stated "strong cash
flows," down from 32% who felt that way in September, and 20%
pointed to "expansion opportunities" up from 6% in September.
Just over one-third (35%) of producers in this month's survey
said they expect farmland values to rise in their area in the
upcoming year, while nearly two-thirds (65%) of survey respondents
expect farmland values to rise over the next 5 years. As a result,
the Short-Term Farmland Value Index changed little, dropping
just one point compared to a month earlier, while the Long-Term
Farmland Value Expectations Index rose three points. Key
reasons cited by producers for optimism about farmland values over
the next five years continue to be non-farm investor demand,
followed by inflation.
Dry weather this past spring and summer stimulated discussions
among producers about shifts in long-term weather patterns. This
month's survey asked corn and soybean producers if they have
explicitly made any changes in their farming operation in response
to changes in long-term weather patterns in their area. Nearly one
out of four corn/soybean farmers (24%) in the October survey
indicated they implemented changes in their farm operations to
better deal with shifting weather patterns. A follow-up question
posed only to farmers who said they've made changes, asked them to
identify the biggest operational changes they've made to date.
Responses indicated farmers are choosing from among a broad mix of
technologies and capital investments to adapt to changing weather
patterns, including: increased use of no-till (25% of respondents);
changed mix of crops planted (23% of respondents); planted more
drought resistant varieties (20% of respondents); installed tile
drainage (9% of respondents); and installed irrigation (9% of
respondents).
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 (www.cmegroup.com) enables clients to
trade futures, options, cash and OTC markets, optimize portfolios,
and analyze data – empowering market participants worldwide to
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rates, equity indexes, foreign
exchange, energy, agricultural
products and metals. The company offers futures and
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fixed income trading via BrokerTec and foreign exchange trading on
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Clearing.
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Writer: Kami Goodwin,
765-494-6999, kami@purdue.edu
Source: James Mintert,
765-494-7004, jmintert@purdue.edu
Related websites:
Purdue University Center for Commercial
Agriculture: http://purdue.edu/commercialag
CME Group: http://www.cmegroup.com/
Photo Caption: Farmer sentiment rises as producers report
improved financial conditions on their farms (Purdue/CME Group Ag Economy Barometer/James Mintert).
https://www.purdue.edu/uns/images/2023/ageconomy-barometer2310LO.jpg
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SOURCE CME Group