Farmers’ sentiment dips in August
U.S. farmer sentiment declined in August according to the latest Purdue University/CME Group Ag Economy Barometer.
Purdue University ag economist Jim Mintert says the decline was fueled by producers’ weaker view of current conditions. “I suspect a chunk of that was attributable to the weakness that we’ve seen in commodity prices going from the tail end of June, beginning of July,” he says. “That’s causing people to have less optimism about their current situation. That’s clearly the driver, from a from a longer-term standpoint.” The Current Conditions Index fell 13 points to 108 and the Future Expectations Index declined 5 points to 119.
He tells Brownfield producers remain concerned about production costs, with higher input costs at the top of the list. “We have seen some declines in fertilizer values, which has helped,” he says. “But other cost components have either remained the same or in some cases continue to go up.”
Mintert says about a quarter of respondents expressed concern about rising interest rates. “Given the fact that people are entering this environment with pretty strong balance sheets, pretty strong working capital positions, it’s maybe not top of mind to the same extent it would be if the last couple of years have been a little tougher from an income standpoint,” he says.
Mintert says farmers reported little change in their farms’ financial condition compared to the previous month, however, conditions are weaker compared to the same time a year ago.
The Ag Economy Barometer is a monthly national survey of 400 U.S. agricultural producers.
AUDIO: Jim Mintert, August Ag Economy Barometer