The February Purdue University/CME Group Ag Economy Barometer reading reached 111, marking a five-point rise from last month, said Purdue Agricultural Economist James Mintert, in a release.
The small uptick was attributed to producers expressing increased optimism about the future, with the Future Expectations Index climbing seven points to 115, Mintert said. However, the Current Conditions Index remained unchanged.
Despite their improved outlook, farmers’ financial performance expectations did not keep pace, he said. February’s Farm Financial Performance Index registered at 85, a slight dip from January and notably lower than its recent peak in December.
The February survey was conducted from Feb. 12-16.
WEAK PRICES
Weak crop prices continued to weigh heavily on financial expectations, with mid-February eastern Corn Belt cash prices for corn and soybeans declining by 7% and 8%, respectively, compared with two months earlier, Mintert said. When producers were asked about their primary concerns for farm operations in the upcoming year, the top concern cited by 34% of respondents was “high input costs,” closely followed by “lower crop/livestock prices,” chosen by 28%.
Worries about rising interest rates seem to have diminished somewhat from previous surveys, with 18% of February respondents citing it as a top concern, down from 26% in November.
CAPITAL INVESTMENT INDEX WEAK
The Farm Capital Investment Index remained weak at 34 points, nine points lower than last year, Mintert said. Producers expressing reluctance about making large investments highlighted concerns over high production costs and weak output prices.
The percentage of farmers worried about farm profitability has tripled since October, he said. This month, 22 of every 100 farmers pointed to farm profitability concerns, while last fall only seven out of every 100 felt the same way.
LAND VALUE CONCERNS SOFTEN
The Short-Term Farmland Values Expectations Index held steady in comparison to January but declined by four points from a year ago and by 30 points from two years ago, Mintert said. Although the farmland index remained positive, it was clear that overall sentiment regarding future increases in farmland values was weaker than a couple of years ago.
Among producers who expected values to increase in the next year, the top reason cited was demand from non-farm investors, he said.
Nearly dour out of 10 respondents expressed no plans for growth, with another 14% saying they planned to exit or retire, Mintert said. On the other hand, just over three out of 10 respondents expected their farm’s annual growth rate to exceed 5%.
Interest in leasing farmland for solar energy development remained strong, with 10% of respondents having discussed such projects in the last six months, Mintert said.
CATTLE, BEEF RECAP
The USDA reported formula and contract base prices for live FOB steers and heifers this week ranged from $183.71 per cwt to $186.24, compared with last week’s range of $182.64 to $185.54 per cwt. FOB dressed steers, and heifers went for $287.80 per cwt to $290.93, compared with $283.61 to $290.96.
The USDA choice cutout Thursday was up $1.70 per cwt at $306.61 while select was up $1.17 at $296.26. The choice/select spread widened to $10.35 from $9.82 with 77 loads of fabricated product and 20 loads of trimmings and grinds sold into the spot market.
The daily weighted average USDA listed wholesale price for fresh 90% lean beef was $317.53 per cwt, and 50% beef was $96.05.
The USDA said basis bids for corn from feeders in the Southern Plains were unchanged at $1.40 to $1.50 a bushel over the May corn contract, which settled at $4.38 a bushel, up $0.09 1/4.
The CME Feeder Cattle Index for the seven days ended Wednesday was $248.87 per cwt, up $1.17. This compares with Thursday’s Mar contract settlement of $251.02, unchanged.