US farmers’ outlook improved in May as the Purdue University/CME Group Ag Economy Barometer index rose to 108, marking a nine-point increase from April, said Purdue Agricultural Economist James Mintert, in a release.
This month’s Ag Economy Barometer survey was conducted from May 13-17.
Both of the barometer’s subindices saw increases, with the Index of Future Expectations climbing 11 points to 117 and the Current Conditions Index rising six points, Mintert said. The boost in the Index of Future Expectations reflects farmers’ expectation that conditions will improve, although it’s clear 2024’s financial challenges were still a concern.
A rise in crop prices from the April survey’s date to mid-May played a role in boosting farmer sentiment this month, he said. By mid-May, Eastern Corn Belt cash corn prices had increased by 6% to 7%, and soybean prices had risen by 2% to 3% since the April survey was conducted.
The improvement in prices along with good corn and soybean planting progress contributed to the sentiment improvement, Mintert said.
FINANCIAL PERFORMANCE UP
The Farm Financial Performance Index rose to 82 in May, a six-point increase from April, he said. The index asked producers to compare their farm’s expected financial performance to last year.
However, despite the gain, the index remained 15 points lower than at the end of last year indicating producers still anticipated 2024 being a more financially challenging year than in 2023, Mintert said.
CAPITAL INVESTMENT OUTLOOK UP
Producers’ outlook on capital investments improved modestly in May, with the Farm Capital Investment Index rising to 35, up four points from its all-time low reading of 31 in April, he said. Although the index improved, the survey revealed that 77% of respondents believed it was a bad time to make large investments, while only 12% felt it was a good time.
Interest rates and elevated prices for farm machinery and new construction were the main reasons cited for this cautious approach, Mintert said. Among those who considered it a good time to invest, nearly half (45%) cited high inventories at machinery dealers as the key factor.
CARBON CAPTURE INTEREST UP
Interest in developing Carbon Capture and Storage projects by ethanol plants is rising, partly driven by tax credits in the Inflation Reduction Act, he said. This month’s survey inquired about farmers’ experiences with potential CCS projects being developed by ethanol plants.
Seven percent of respondents reported being approached about such projects, Mintert said. Payment rates per acre ranged from under $26 to more than $50, indicating there is a lot of payment rate variability.
CATTLE, BEEF RECAP
The USDA reported formula and contract base prices for live FOB steers and heifers this week ranged from $186.00 per cwt to $191.52, compared with last week’s range of $186.66 to $192.34 per cwt. FOB dressed steers, and heifers went for $294.00 per cwt to $298.58, compared with $293.35 to $302.05.
The USDA choice cutout Wednesday was down $2.09 per cwt at $314.79 while select was off $3.57 at $30.90. The choice/select spread widened to $13.89 from $12.41 with 90 loads of fabricated product and 25 loads of trimmings and grinds sold into the spot market.
The weighted average USDA listed wholesale price for fresh 90% lean beef was $360.21 per cwt, and 50% beef was $77.54.
The USDA said basis bids for corn from feeders in the Southern Plains were unchanged at $1.42 to $1.52 a bushel over the Jul corn contract, which settled at $4.39 1/4 a bushel, down $0.03 1/4.
The CME Feeder Cattle Index for the seven days ended Tuesday was $250.86 per cwt, down $0.03. This compares with Tuesday’s Aug contract settlement of $254.82, down $1.20.