The Purdue College/CME Group Ag Economic system Barometer index improved in June, rising 17 factors to a studying of 121. The upswing in sentiment was pushed by producers’ extra optimistic view of the long run; nonetheless, their notion of present situations remained unchanged from Might. The Index of Future Expectations rose 25 factors to a studying of 123, whereas the Index of Present Situations held flat at a studying of 116 in June. The Ag Economic system Barometer is calculated every month from 400 U.S. agricultural producers’ responses to a phone survey. This month’s survey was carried out June 12-16.
“Optimism about U.S. agriculture’s future and a extra sanguine rate of interest outlook assist clarify producers’ extra constructive view of the long run expressed in June’s survey; nonetheless present situations within the farming economic system proceed to current a problem for some producers,” mentioned James Mintert, the barometer’s principal investigator and director of Purdue College’s Middle for Business Agriculture. “This month 4 out of 10 producers said that their monetary state of affairs has deteriorated in comparison with a yr in the past.”
To raised perceive the big month-to-month swing in producers’ expectations for the long run, responses between the Might and June surveys have been in contrast. In June, 20% of respondents mentioned they anticipated their monetary situation to enhance over the following yr, in comparison with simply 13% who mentioned that in Might. In the meantime, solely 32% anticipate their farm’s monetary state of affairs to say no over the upcoming yr, in comparison with 44% who responded that approach in Might. Producers’ improved perspective on the long run was not targeted solely on their very own farms however prolonged to all of U.S. agriculture. The share of producers anticipating good occasions for U.S. agriculture within the subsequent 5 years rose 8 factors to 33%, whereas the share of producers anticipating dangerous occasions fell 3 factors to 41%.
The Farm Monetary Efficiency Index additionally rose this month, up 10 factors from Might, and was doubtless a results of a late-Might to early-June rally in harvest-time costs for corn and soybeans, in addition to optimism towards constructive returns for cattle producers. In June, 50% of respondents mentioned they anticipate “good occasions” for livestock producers within the subsequent 5 years, up from 37% in Might. Optimism about constructive returns for cattle producers, particularly cow-calf operations, was doubtless a key issue behind the constructive livestock outlook.
The Farm Capital Funding Index rose 5 factors in June to a studying of 42; nonetheless, practically 75% of respondents nonetheless really feel now could be a nasty time to make massive investments of their farming operation. Respondents in June cited rising rates of interest (35% of respondents) and rising costs for tools and new building (37% of respondents) as key causes for viewing now as a nasty time for investments.
Producers have been extra optimistic about farmland values in June as each the quick and long-run farmland worth indices rose. The short-term index, which asks producers about their outlook over the following 12 months, jumped 16 factors to a studying of 126, its highest studying since final November. In the meantime, the long-term index, which asks producers to look forward 5 years, rose a extra modest 6 factors to a studying of 151, pushing that index as much as its highest degree since February 2022. Moreover, 43% of producers within the June survey suppose rates of interest have peaked, and practically 1 / 4 of survey respondents anticipate to see decrease rates of interest throughout the subsequent yr.
This month’s survey additionally included a query focused towards corn and soybean producers concerning their expectations for farmland money rental charges in 2024. Twenty-five p.c of the corn/soybean producers on this month’s survey mentioned they anticipate 2024 money rental charges of their space to rise above 2023’s charges. Of these respondents who mentioned they anticipate rental charges to rise, practically one-third (32%) mentioned they anticipate 2024 rental charges to extend as much as 5%, whereas practically half (49%) search for charges to rise from 5% to 10%, when in comparison with 2023.
This month’s survey included inquiries to be taught extra about producers’ ideas on the passage of a brand new farm invoice. Amongst corn and soybean producers, the Crop Insurance coverage title and the Commodity title stay the 2 most vital farm invoice parts. When requested about expectations for PLC reference costs for corn and soybeans, half of corn and soybean producers mentioned they anticipate Congress to boost costs for each.
In response to the current Supreme Court docket ruling, which upheld California’s Proposition 12 mandating housing requirements for hogs processed into pork that shall be bought in that state, all survey respondents have been requested in regards to the chance Congress would overturn the proposition as a part of a brand new farm invoice. Producers have been cut up of their response to this query, with 36% stating it’s both considerably or not possible that Congress will attempt to overturn the proposition, and 25% stating it’s at the very least considerably doubtless Congress will tackle Proposition 12 in new farm invoice laws.
The total Ag Economic system Barometer report could be discovered here.