Grower sentiment fell to its weakest reading since July 2022 according to the Purdue University/CME Group Ag Economy Barometer reading — sentiment declined 19 points to a reading of 104 in May. In addition, the Index of Future Expectations was down 22 points to a reading of 98.
According to the release, the lower sentiment was fueled by weakened crop prices.
“In mid-May, Eastern Corn Belt fall delivery bids for corn fell over $0.50/bushel (10%), and soybean bids declined over $1.00/bushel (8%), while new crop June/July delivery wheat bids declined nearly $0.50/bushel (8%), all compared to bids available in mid-April, when last month’s barometer survey was conducted,” the release noted.
With softer crop prices, the Farm Financial Performance Index was impacted as well, dropping 17 points to a reading of 76 in May. Researchers noted that crop price weakness, uncertainty related to U.S. bank failures and rising interest rates, were key factors behind the decline.
“Producers are feeling the squeeze from weakened crop prices, which has reduced their expectations for strong financial performance in the coming year,” said James Mintert, the barometer’s principal investigator and director of Purdue University’s Center for Commercial Agriculture.
As for top concerns, growers noted that higher input cost remains top-of-mind, but the release notes that concern over the risk of lower crop and/or livestock prices is growing.
“This month 26% of respondents chose lower output prices as their top concern, compared with just 8% of respondents who felt that way in September,” the release said. “Meanwhile, nearly three-fifths (59%) of producers said they expect interest rates to rise during the upcoming year, and 22% of respondents chose rising interest rates as a top concern for their farm in the next 12 months. Additionally, 40% of farmers in this month’s poll said they expect this spring’s U.S. bank failures to lead to some changes in farm loan terms in the upcoming year, possibly putting more financial pressure on their operations.”
Make sure to read the full release of readings here.
