Farmer sentiment weakened slightly in December as the Purdue University-CME Group Ag Economy Barometer Index dropped just three points to a reading of 136, said Michael Langemeier and James Mintert, Purdue University agricultural economists, in a report.
The December barometer survey took place from Dec. 1-5.
EXPECTATIONS DOWN
Weakness in the barometer was attributable to a modest decline in producers’ long-term outlook, as the Future Expectations Index fell to 140, four points below a month earlier, the economists said.
Meanwhile, the Current Conditions Index, at 128, was unchanged from November’s reading, they said. Angst about prospects for US soybean exports amid increasing competition from Brazil contributed to a slightly weaker outlook for the future among crop producers.
Producers’ expectations for their farms’ financial performance changed little compared with November, as the financial performance index rose just two points to 94, the report said. Underlying the index’s small increase was a shift toward more producers saying they expected this year’s farm financial performance to be about the same as last year’s.
CAPITAL INVESTMENT INDEX UP SLIGHTLY
At a reading of 58, the Farm Capital Investment Index also increased two points compared with a month earlier, the pair said. Although the investment index rose slightly in December, 60% of producers still said it was a bad time to make a large investment in their farms.
Farmers’ perspectives on US agricultural exports were mixed in December, the economists said. Responding to a generic question about the future of agricultural exports, producers provided one of their most optimistic outlooks of the year, with just 5% of producers looking for exports to decline over the next five years.
However, when asked to focus more specifically on soybeans, a key agricultural export, their outlook was notably less sanguine, the report said. In December, 13% of corn and soybean growers said they expected soybean exports to decline over the upcoming five years, up from 8% who felt this way in November.
Similarly, the percentage of growers who expected soybean exports to increase in the next five years fell from 47% in November to 39% in December, they said.
Increasing competition from Brazil weighed on producers’ minds, the economists said. Eighty-four percent of corn and soybean producers said they were concerned or very concerned about the competitiveness of US soybean exports versus Brazil’s, with 45% indicating they were very concerned.
OPTIMISTIC ABOUT FARMLAND VALUES
Farmers remained optimistic about farmland values in December, the economists said. The Short-Term Farmland Value Expectations Index and the long-term index were virtually unchanged, as both rose just one point from November.
The small increase left the short-term index at 117, which was 11 points above its most recent low in September and one points higher than a year earlier, they said. The long-term index reading of 166, a record high, was 20 points above its most recent low in September and 11 points higher than a year ago.
CATTLE, BEEF RECAP
The USDA reported formula and contract base prices for live FOB steers and heifers this week ranged from $231.58 per cwt to $234.75, compared with last week’s range of $226.55 to $231.21 per cwt. FOB dressed steers and heifers went for $360.69 per cwt to $363.26, compared with $358.31 to $363.53.
The USDA choice cutout Tuesday was down $2.45 per cwt at $351.25 while select was off $0.42 at $351.08. The choice/select spread narrowed to $0.17 from $2.20 with 146 loads of fabricated product and 20 loads of trimmings and grinds sold into the spot market.
The USDA-listed the weighted average wholesale price for fresh 90% lean beef as $404.46 per cwt, and 50% beef was $135.39.
The USDA said basis bids for corn from feeders in the Southern Plains were unchanged at $0.90 to $1.10 a bushel over the Mar corn contract, which settled at $4.44, down $0.00 1/2.
The CME Feeder Cattle Index for the seven days ended Monday was $362.17 per cwt, up $9.06. This compares with Tuesday’s Jan contract settlement of $362.17, up $3.20.