The Purdue University/CME Group Ag Economy Barometer farmer sentiment index rose 14 points in August to a reading of 117, said 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 survey was conducted from August 15-19, after the USDA released the August Crop Production and World Agricultural Supply & Demand Estimates reports.
The rise in the overall measure of agricultural producer sentiment was driven by increases in the Index of Current Conditions, which rose nine points to 118 and the Index of Future Expectations, which climbed 16 points to 116, Mintert said.
FINANCIAL FEARS DECLINE
Producers in the August survey were less worried about their farm’s financial situation than in July, although they remained concerned about a possible cost/price squeeze, the release said.
This month, more producers indicated they were expecting better financial performance for their farms in 2022 and the upcoming year, as the Farm Financial Performance Index rose 11 points to a reading of 99, Mintert said.
Corn and soybean prices rallied from their July lows into mid-August which, along with expectations for good yields, helped explain some of the gain in financial performance expectations.
UNCERTAINTY REMAINS
At the same time, there continues to be a tremendous amount of uncertainty among producers regarding the future cost of items they purchase for their farms and family usage, the release said.
When asked about their biggest concerns for the next year, 53% of respondents chose higher input costs, followed by rising interest rates (14%), input availability (12%) and lower output prices (11%), he said.
On the farm level, there is a big disparity in opinions among farmers regarding whether input prices will retreat or escalate in 2023, Mintert said. About 40% of producers expect 2023 crop input prices to be unchanged or decline by as much as 10%, from 2022.
On the other hand, a little more than half of all producers expected input prices to rise from 1% to 20%, he said. At the consumer level, 48% of respondents said they expected the rate of inflation for consumer items during the next 12 months to be 0% to 6%.
Compared with previous barometer surveys, more producers said they expected inflation to be in the upper end of that range than those who felt that way earlier this year, the release said.
Producers continued to view now as a bad time to make large farm machinery and building investments, Mintert said. In a follow-up question, 49% of these respondents cited increasing prices as the primary reason.
CATTLE, BEEF RECAP
The USDA reported formula and contract base prices for live FOB steers and heifers this week ranged from $147.10 to $147.20 per cwt, compared with last week’s range of $142.00 to $147.63. FOB dressed steers, and heifers went for $224.02 to $224.08 per cwt, versus $222.42 to $228.22.
The USDA choice cutout Tuesday was up $1.05 per cwt at $260.47 while select was up $0.72 at $239.30. The choice/select spread widened to $21.17 from $20.84 with 87 loads of fabricated product and 38 loads of trimmings and grinds sold into the spot market.
The USDA said basis bids for corn from feeders in the Southern Plains were up $0.10 to $0.15 at $2.60 to $2.75 a bushel over the Sep futures, which settled at $6.80 3/4 a bushel and for southwest Kansas were at $0.85 over Dec, which settled at $6.76, up $0.10 1/4.
The CME Feeder Cattle Index for the seven days ended Monday was $179.58 per cwt up $0.62. This compares with Tuesday’s Sep contract settlement of $184.17, up $0.30.