Farmer sentiment was notably lower in August, as the monthly Purdue University/CME Group Ag Economy Barometer index dipped eight points to a reading of 115, said Purdue University Agricultural Economist James Mintert in a release.
This month’s Ag Economy Barometer survey was conducted from Aug. 14-18.
This month’s decline was fueled by producers’ weaker perception of current conditions on their farms and in US agriculture, Mintert said.
The Current Conditions Index fell 13 points to a reading of 108, he said. The Future Expectations Index also declined, down five points in August to a reading of 119.
RISING INTEREST RATES
Rising interest rates and concerns about high input prices continued to pressure producer sentiment, Mintert said. This month about 60% of producers surveyed said they expected interest rates to rise in the coming year.
When asked about their top concerns for their farming operations in the next 12 months, 34% of responding producers continued to point to higher input prices and 24% to rising interest rates, he said.
Even though crop prices weakened significantly this summer, only one in five producers chose declining commodity prices as one of their top concerns, Mintert said.
CAPITAL INVESTMENT INDEX LOWER
The Farm Capital Investment Index was lower this month, falling eight points to a reading of 37, he said. Increasing prices for farm machinery and new construction along with rising interest rates continued to be the two most commonly cited reasons for their negative view.
Meanwhile, producers’ rating of farm financial conditions changed little, as the Farm Financial Performance Index declined just one point to a reading of 86, Mintert said.
Yet the Short-Term Farmland Values Expectation Index rose one point to 126, while the long-term index was unchanged at a reading of 151.
Thirty-nine percent of respondents said they expected farmland values to rise over the next year, while 13% said they looked for values to decline, Mintert said. When asked about their longer-term view of farmland values, 63% said they expected values to rise over the next five years, while 12% said they expected values to fall.
CARBON CONTRACTS
Corn and soybean growers were asked about the types of conversations they have had with those companies, he said. In the August survey, 6% of corn and soybean growers said they had engaged in discussions with companies about receiving payments to capture carbon on their farms, while just 2% said they had signed a carbon contract.
Nearly half (47%) of the farms who discussed contract terms with a company said they were offered a payment rate of $10 to $20 per tonne of carbon captured, Mintert said. Among the farms who engaged in discussions but chose not to sign, half said it was because the payment level was too low.
CATTLE, BEEF RECAP
The USDA reported formula and contract base prices for live FOB steers and heifers this week ranged from $180.19 per cwt to $180.64, compared with last week’s range of $179.00 to $185.93 per cwt. FOB dressed steers, and heifers went for $284.23 per cwt to $285.41, compared with $280.56 to $290.72.
The USDA choice cutout Tuesday was up $0.99 per cwt at $315.48 while select was off $0.75 at $289.54. The choice/select spread widened to $25.94 from $24.20 with 97 loads of fabricated product and 12 loads of trimmings and grinds sold into the spot market.
The USDA said basis bids for corn from feeders in the Southern Plains were $1.50 to $1.70 a bushel over the Dec corn contract, which settled at $4.86 a bushel, up $0.04 1/2.
The CME Feeder Cattle Index for the seven days ended Monday was $247.81 per cwt, down $0.93. This compares with Tuesday’s Sep contract settlement of $251.37 per cwt, down $0.47.