Crop prices impact farmer sentiment in latest Ag Economy Barometer
Lower crop prices played a role in the drop in farmer sentiment in the latest Purdue University/CME Group Ag Economy Barometer.
Jim Mintert is the survey’s principal investigator and director of Purdue’s Center for Commercial Agriculture.
“If you look at commodity prices from when we collected data in April to when we collected data in May, depending on whether you’re looking at corn, soybeans or wheat, those prices were all down between 8 and 10 percent,” he says. “For a lot of farm operations that price decline is enough to spell the difference between profitability and operating in the red, so I think that pretty much explains why the barometer was as weak as it was this month.”
According to Purdue, Eastern Corn Belt fall delivery bids for corn fell over $0.50 per bushel and soybean bids declined over $1 per bushel, while new crop June/July delivery wheat bids declined nearly $0.50 per bushel in mid-May, all compared to bids available in mid-April. The latest survey was conducted May 15-19.
Producer sentiment fell to its weakest reading since July 2022, as the overall Ag Economy Barometer Index declined 19 points to a reading of 104 in the latest survey. The Index of Future Expectations declined 22 points to 98. The Index of Current Conditions fell 13 points to a reading of 116.
The survey also shows that one of the top concerns among producers in the upcoming year is lower crop or livestock prices.
“That jumped to 26 percent this month. That was their biggest concern for the upcoming year. If you go back to last fall, for example the beginning of fall harvest, only 8 percent of the people in the survey were choosing that as one of their biggest concerns. This month, roughly one out of four were choosing it. If you compare it to April, 17 percent chose this is the biggest concern a month ago, so you could see kind of a change going on there,” he says. “And then of course the other factor is people are still worried about high input costs. I think roughly one third said that’s still one of their biggest concerns. Rising interest rates are another concern. This month 22 percent chose that as one of their biggest concerns and the month prior, it was 26 percent. So, it’s not just commodity prices, but you could definitely see a change with respect to the focus people were having on the importance of lower crop and livestock prices impacting their operation.”
The Ag Economy Barometer is a monthly national survey of 400 U.S. agricultural producers.
Audio: Jim Mintert