Agricultural producers’ sentiment dipped slightly for the second month in a row, as the Purdue University/CME Group Ag Economy Barometer index fell 9 points to a reading of 106 in September. Producers expressed concern about their current situation as well as future prospects for their farms. The Current Conditions and Future Expectations Indices both declined 10 points.
Weakening prices for major crops and ongoing concerns about high production costs and interest rates weighed on producers’ minds in the September survey. Producers continue to point to high input costs as a top concern for their farming operations in the year ahead. One-third of respondents cited it as their number one concern, followed by rising interest rates, chosen by 25% of respondents, and lower crop and/or livestock prices, chosen by 22% of farmers.
There was a small uptick in the Farm Capital Investment Index, up 2-points. The primary reasons among those who feel now is a bad time for large investments are rising interest rates and the high cost of machinery and new construction. Notably, 40% of the producers who feel it’s a bad time to invest cited rising interest rates as a key reason, up from 35% in August. There was a slight rise in the percentage of producers who said now is a good time to make investments, citing strong cash flows on their farm operations as their primary reason. The Farm Financial Performance Index was unchanged in September compared to August.
Producers remain relatively optimistic about farmland values. The Short-Term Farmland Value Expectations Index was unchanged at a reading of 126, while the long-term index rose 2 points to 153. 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.
EDITOR’S TAKE:
The title would lead one to believe that things are quite unsettled down on the farm. However, a deeper dive reveals that overall farmers are concerned, but they still are optimistic about land values and they still have plenty of cash flow! Many of us are concerned about rising interest rates. And, yes, commodity prices have fluctuated some in recent months, but lately they have trended upward. Couple those higher prices with some pretty good yields and one must conclude that things are still doing well in rural America. That said, now might be a good time to emphasize AgPack® and how the farmers/ranchers in your area could save up to $32,000 in operating costs by simply purchasing or leasing a new or qualified used vehicle from you, a CAD member. AgPack® is no joke. It is not too good to be true. It provides serious exclusive rebates and discounts on products the farmers/ranchers use. Plus, and here’s the really good part, it doesn’t cost them an additional penny. Beat the competition and help the farmers/ranchers with AgPack®!
