Producer Sentiment drops as crop prices weaken and production costs rise
Farmer sentiment declined for a second consecutive month, according to the Purdue/CME Group Ag Economy Barometer. The September index fell 9 points to a reading of 106.
Jim Mintert, director of Purdue’s Center for Commercial Agriculture, says producers expressed concerns about the current situation and future expectations. “High input cost, rising interest rates, and lower crop and livestock prices,” he says. “And you know you put all that together, I think what people are really worried about is a cost-price squeeze. We’ve been talking about that for a couple of months now, and that I think continues to be the number one issue for folks.”
The Current Conditions and Future Expectations Indices both declined 10 points to a reading of 98 and 109.
He tells Brownfield as producers finalize plans for the 2024 growing season, they should very closely evaluate the financial needs for their operations. “Think about the decisions they’re making with respect to production cost, thinking about their input purchases, thinking about which inputs they use,” he says.
Mintert says longer term, producers should also assess their working capital position. “As they think about making investments, be cautious about making those investments in terms of preserving working capital,” he says. “Because your best cushion against a downturn is you’re working capital and maintaining your positive cash balances.”
All three indices stand below their readings from one year ago.
The Ag Economy Barometer is a monthly national survey of 400 U.S. agricultural producers.
AUDIO: Jim Mintert, Purdue Center for Commercial Agriculture