Unlike the two most recent presidential elections, the November mid-term election outcomes did little to swing farmer sentiment, Purdue University Agricultural Economist James Mintert said in a release.
The Ag Economy Barometer is calculated each month from 400 US agricultural producers’ responses to a telephone survey, the release said. This month’s survey was conducted after the US mid-term elections from Nov. 14-18.
SUB-INDICES MOVE SLIGHTLY
The monthly Purdue University/CME Group Agricultural Economy Barometer came in at a reading of 102 in November, unchanged from October, Mintert said.
There was, however, slight movement in both of the barometer’s sub-indices, Mintert said. The Current Conditions Index declined three points to a reading of 98 while the Future Expectations Index increased two points to a reading of 104.
Even though sentiment remained relatively unchanged in November, producers continued to look at their bottom lines and rising interest rates, which, combined with high input and energy costs, were creating anxiety at the farm level, he said.
The Farm Financial Performance Index improved modestly this month to 91, up five points from October, but it remained 14% below this same time period last year, Mintert said. While nearly one-third of producers continued to express concern that their farms’ financial performance this year will be worse than the prior year, just over two-thirds of producers expected their farms’ 2022 financial performance to be equal to or exceed 2021’s.
Still, high input costs continued to weigh on producers’ minds with 42% of respondents in this month’s survey citing it as their top concern in the year ahead, he said. Just over one-fifth (21%) of respondents chose rising interest rates, while 14% cited input availability and declining commodity prices as a top concern.
CAPITAL INVESTMENTS INDEX DROPS
The Farm Capital Investment Index dropped to its record low of 31 in November, erasing gains from the previous month, Mintert said. Nearly 80% of respondents indicated now was a “bad time” to make large investments in farm machinery and of those, 47% chose “rising prices of farm machinery and new construction” as the primary reason. By comparison, only 10% of respondents felt now was a “good time” to make large investments.
Given this year’s sharp rise in energy prices, this month’s survey asked producers how they’ve responded, he said. Just over a fourth (27%) indicated they’ve made changes in their operation because of rising energy prices.
Of those, 33% indicated they reduced tillage, 24% reduced nitrogen rates and/or changed application timing, 11% increased their use of no-till, and 8% said they reduced crop drying.
CATTLE, BEEF RECAP
The USDA reported formula and contract base prices for live FOB steers and heifers this week ranged from $156.91 to $158.67 per cwt, compared with last week’s range of $149.09 to $159.50. FOB dressed steers, and heifers went for $244.61 to $247.49 per cwt, versus $237.81 to $250.98.
The USDA choice cutout Tuesday day was down $0.66 per cwt at $242.65 while select was down $1.97 at $219.14. The choice/select spread widened to $23.51 from $22.20 with 119 loads of fabricated product and 28 loads of trimmings and grinds sold into the spot market.
The USDA said basis bids for corn from feeders in the Southern Plains were steady at $1.90 to $2.10 a bushel over the Mar futures and for southwest Kansas were unchanged at $1.00 over Mar, which settled at $6.37 1/4, down $0.03 1/4.
No cattle contracts were tendered for delivery Tuesday.
The CME Feeder Cattle Index for the seven days ended Monday was $178.53 per cwt up $0.39. This compares with Tuesday’s Jan contract settlement of $181.80, down $1.97.