The monthly Purdue University/CME Group Ag Economy Barometer farmer sentiment index rose six points in July to a reading of 103, said a release from Purdue Agricultural Economist James Mintert, in a release.
The Ag Economy Barometer is calculated each month from 400 US agricultural producers’ responses to a telephone survey. This month’s survey was conducted between July 11-15.
OPTIMISTIC ABOUT FUTURE
Producers were somewhat more optimistic about current and future economic conditions on their farms when compared with the June survey, Mintert said. The Index of Current Conditions rose 10 points to a reading of 109 and the Index of Future Expectations rose four points to a reading of 100.
Although all three indices rose this month, they were still 23-24% lower than a year earlier, he said.
While there was a slight uptick in sentiment this month, there still was a tremendous amount of uncertainty in the agricultural economy, the release said. Key commodity prices, including wheat, corn and soybeans, all weakened during this month, and producers remained concerned over rising input prices and input availability.
Farm operators in this month’s survey voiced concerns about several key issues affecting their operations: higher input prices (42% of respondents), lower crop prices (19% of respondents), rising interest rates (17% of respondents) and availability of inputs (15% of respondents), the release said.
INCOME EXPECTATIONS RISE
The Farm Financial Performance Index, which primarily reflects income expectations for the current year, rose five points to a reading of 88 in June, Mintert said.
However, this month 49% of respondents said they expected their farm to be worse off financially a year from now, which compares with 51% who felt this way in June, he said. This was a much more pessimistic outlook than producers provided a year ago when just 30% of them said they expected their financial condition to worsen in the upcoming year.
Producers remained uncertain about their expectations for crop input prices over the next 12 months, the release said. In July, 18% of crop producers said they expected 2023’s crop input prices to decline from 1% to 10% when compared with 2022’s prices, versus 12% who felt this way in June.
Meanwhile, 26% of respondents in July said they expected 2023’s prices to rise by 10% or more, compared with 38% who expected a crop input price rise of this magnitude in June.
INPUT COSTS WORRY
The rise in input costs was leading some producers to reassess their cropping plans for the upcoming year, Mintert said. In this month’s survey, 24% of crop producers said that because of the rise in input costs they planned to change their farm’s crop mix in 2023.
CATTLE, BEEF RECAP
The USDA reported formula and contract base prices for live FOB steers and heifers this week ranged from $136.32 to $140.37 per cwt, compared with last week’s range of $136.00 to $150.00. FOB dressed steers, and heifers went for $214.85 to $217.25 per cwt, versus $213.91 to $219.67.
The USDA choice cutout Tuesday was down $2.14 per cwt at $268.46, while select was down $1.35 at $241.55. The choice/select spread narrowed to $26.91 from $27.70 with 106 loads of fabricated product and 50 loads of trimmings and grinds sold into the spot market.
The USDA said basis bids for corn from feeders in the Southern Plains were steady at $2.60 to $2.70 a bushel over the Sep futures and for southwest Kansas were unchanged at $0.10 over Sep, which settled at $5.91 1/4, down $0.15 3/4.
The CME Feeder Cattle Index for the seven days ended Monday was $174.40 per cwt down $0.34. This compares with Tuesday’s Aug contract settlement of $178.12, down $1.52.