US Agricultural Producer sentiment witnessed a modest rise in July compared to June, according to the Purdue University/CME Group Ag Economy Barometer. The index, which reflects the views of 400 US Agricultural Producers, rose two points to a reading of 123.
Key Insights into US Agricultural Producer Sentiment
Current Conditions and Future Expectations
US Agricultural Producers expressed a more optimistic outlook regarding both current conditions and future expectations on their farms. The Index of Current Conditions among US Agricultural Producers rose by 5 points to 121, while the Index of Future Expectations increased by one point to 124.
Farm Capital Investment Index
July’s Farm Capital Investment Index for US Agricultural Producers saw a modest rise of 3 points to 45. This marks a significant improvement, up 14 points since November 2022. The percentage of US Agricultural Producers considering now a good time for large investments has risen from 10% in November to 17% in July.
Concerns About Interest Rates Among US Agricultural Producers
Despite the improvement in investment sentiment, 65% of US Agricultural Producers in July expect interest rates to increase, up from 57% in June. Concern about rising interest rates was the top reason cited by those who felt it was a bad time to make large investments.
Top Concerns for US Agricultural Producer Operations
US Agricultural Producers’ primary concern for their farming operations in the upcoming year is higher input costs (37% of respondents), followed by rising interest rates (24%) and lower output prices (19%).
Farmland Value Expectations
Confidence among US Agricultural Producers regarding the future direction of farmland values continues, with the Long-Term Farmland Value Expectations Index remaining unchanged at 151, and the Short-Term Farmland Value Expectations Index declining just one point to 125.
Financial Conditions and Long-Term Perspective
US Agricultural Producers’ rating of financial conditions on their farms remained virtually unchanged, with the Farm Financial Conditions Index rising one point to 87. The percentage of respondents expecting bad times in the upcoming 5 years fell two percentage points to 39% in July.
Cover Crop Usage by US Agricultural Producers
Nearly half (45%) of corn/soybean farmers, representing a segment of US Agricultural Producers, indicated they currently use cover crops, primarily to improve soil health and erosion control. Four out of five (80%) farmers said cover crops improved soil health and yields.
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