Survey: commodity prices, banking sector concerns weaken sentiment

Lower commodity prices played a role in the drop in farmer sentiment in the latest Purdue University/CME Group Ag Economy Barometer

Jim Mintert, the survey’s principal investigator and director of Purdue’s Center for Commercial Agriculture, says the weaker prices from mid-February to mid-March aligned with the timing of the latest survey.   

“If you look at when we collected data in mid-February versus the week we collected data in mid-March, commodity prices for the key commodities including corn, soybeans, and wheat dropped pretty sharply over that timeframe for both old crop and new crop,” he says.

The overall Ag Economy Barometer Index fell eight points to a reading of 117. The Index of Current Conditions declined eight points to a reading of 126 and the Index of Future Expectations fell eight points to a reading of 113.

Mintert tells Brownfield, “that definitely weighed on sentiment. As you look at prospects for income in 2023, one of the things you look at is what’s taking place with respect to new crop futures. Net weakness, I think, played into it.”

He says the survey also picked up weakening sentiment surrounding the Silicon Valley Bank and Signature Bank failures.

“That week of March 13-17 was when the crisis was erupting in the banking sector with Silicon Valley Bank and Signature Bank being shut down. In the open-ended section at the end of the survey where we ask what else is on their mind, and there were several people that mentioned the banking crisis and concerns about what impact that will have on the U.S. economy and what spill-over impacts that might have on agriculture. That probably had some influence, but we don’t know how much.”

The monthly national survey of 400 U.S. agricultural producers was conducted March 13-17.

Audio: Jim Mintert

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