American Farmers' Sentiment Plummets to Lowest Levels Since 2016
The Purdue University-CME Group Ag Economy Barometer Index has revealed that the sentiment among American farmers has plummeted to its lowest point since 2016. This drop is due to concerns over commodity prices, input costs, and the future of trade following the upcoming elections. The decline in income is putting significant pressure on farmers across the country.
The Ag Economy Barometer, which surveys 400 farmers across America, experienced a 12 point drop to 88 in September. This is the lowest reading since March 2016, around the time former president Trump began his first term.
James Mintert and Michael Langemeier from the Purdue Center for Commercial Agriculture noted in their report that these were the weakest barometer and future expectations readings since March 2016, a time when the farm economy was experiencing an economic downturn. They also noted that the current conditions were almost on par with those of April 2020, when the COVID-19 pandemic was a major concern for US farmers. The combination of weak output prices and high input costs were the main issues cited by the survey respondents in September.
The Ag Economy Barometer's sub-indices, the Index of Current Conditions and the Index of Future Expectations, also experienced significant drops. This is largely due to the negative impact of the Bidenomics policies on the farming industry.
The authors of the report explained that farmers are worried about commodity prices, input costs, the future of agricultural trade, and the potential impact of the upcoming election on their farm operations.
The report concluded with the following:
Farmers' concerns about low commodity prices and high input costs leading to poor financial performance expectations have weakened farmer sentiment for the second consecutive month. This decline in sentiment has pushed the Ag Economy Barometer index below 100, indicating that farmer sentiment is lower than during the barometer's base period of late 2015-early 2016 when farm incomes were very weak. Producers are expecting significantly worse financial performance for their farms in the upcoming year compared to their expectations at this time last year. The combination of weak farm income expectations, lingering interest rate concerns, and a pessimistic agricultural export outlook have contributed to the Short-Term Farmland Value Expectations Index falling below 100 for the first time since 2020.
In a separate note, researchers at the University of Missouri are predicting a 35% drop in farm income next year compared to 2022. While incomes are still above the levels seen between 2015 and 2020, the predicted drop is steep due to the high input costs.
Bob Maltsburger, a senior research economist at the Food & Agricultural Policy Research Institute at the university, stated that farmers will have to be much more strategic in their marketing plans in order to maintain a good cash flow.
Bottom Line
The sentiment among American farmers is at its lowest point since 2016 due to a combination of factors including low commodity prices, high input costs, and uncertainty about the future of trade. This situation is putting significant pressure on farmers and could have serious implications for the agricultural industry as a whole. What are your thoughts on this issue? Feel free to share this article with your friends and discuss. Don't forget to sign up for the Daily Briefing, which is available every day at 6pm.
American Farmers' Sentiment Plummets to Lowest Levels Since 2016
The Purdue University-CME Group Ag Economy Barometer Index has revealed that the sentiment among American farmers has plummeted to its lowest point since 2016. This drop is due to concerns over commodity prices, input costs, and the future of trade following the upcoming elections. The decline in income is putting significant pressure on farmers across the country.
The Ag Economy Barometer, which surveys 400 farmers across America, experienced a 12 point drop to 88 in September. This is the lowest reading since March 2016, around the time former president Trump began his first term.
James Mintert and Michael Langemeier from the Purdue Center for Commercial Agriculture noted in their report that these were the weakest barometer and future expectations readings since March 2016, a time when the farm economy was experiencing an economic downturn. They also noted that the current conditions were almost on par with those of April 2020, when the COVID-19 pandemic was a major concern for US farmers. The combination of weak output prices and high input costs were the main issues cited by the survey respondents in September.
The Ag Economy Barometer's sub-indices, the Index of Current Conditions and the Index of Future Expectations, also experienced significant drops. This is largely due to the negative impact of the Bidenomics policies on the farming industry.
The authors of the report explained that farmers are worried about commodity prices, input costs, the future of agricultural trade, and the potential impact of the upcoming election on their farm operations.
The report concluded with the following:
Farmers' concerns about low commodity prices and high input costs leading to poor financial performance expectations have weakened farmer sentiment for the second consecutive month. This decline in sentiment has pushed the Ag Economy Barometer index below 100, indicating that farmer sentiment is lower than during the barometer's base period of late 2015-early 2016 when farm incomes were very weak. Producers are expecting significantly worse financial performance for their farms in the upcoming year compared to their expectations at this time last year. The combination of weak farm income expectations, lingering interest rate concerns, and a pessimistic agricultural export outlook have contributed to the Short-Term Farmland Value Expectations Index falling below 100 for the first time since 2020.
In a separate note, researchers at the University of Missouri are predicting a 35% drop in farm income next year compared to 2022. While incomes are still above the levels seen between 2015 and 2020, the predicted drop is steep due to the high input costs.
Bob Maltsburger, a senior research economist at the Food & Agricultural Policy Research Institute at the university, stated that farmers will have to be much more strategic in their marketing plans in order to maintain a good cash flow.
Bottom Line
The sentiment among American farmers is at its lowest point since 2016 due to a combination of factors including low commodity prices, high input costs, and uncertainty about the future of trade. This situation is putting significant pressure on farmers and could have serious implications for the agricultural industry as a whole. What are your thoughts on this issue? Feel free to share this article with your friends and discuss. Don't forget to sign up for the Daily Briefing, which is available every day at 6pm.
