WEST
LAFAYETTE, Ind., Sept. 3,
2024 /PRNewswire/ -- 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 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' sentiment as the outlook for a
bountiful fall harvest was more than offset by declining crop
prices. This month's survey was conducted from Aug. 12-16, 2024.
"Weakness 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," said James Mintert, the
barometer's principal investigator and director of Purdue University's Center for Commercial
Agriculture.
August's survey results indicate a shift among farmers' 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.
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.
The Farm Financial Performance Index dropped 9 points from
July's 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.
"Farmers have also become less optimistic about farmland values
this summer than in recent years," said Mintert. "The 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."
Respondents' 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.
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's survey, 70% of
U.S. crop farmers anticipate that rental rates will stay the same,
while only 16% expect a decline in lease rates.
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
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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 Mitch Daniels School of
Business, Purdue Computes and the One Health initiative — at
https://www.purdue.edu/president/strategic-initiatives
Writer: Morgan French,
mmfrench@purdue.edu
Source: James Mintert, 765-494-7004,
jmintert@purdue.edu
CME-G
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SOURCE CME Group