WEST
LAFAYETTE, Ind., May 7, 2024
/PRNewswire/ -- April witnessed a steep decline in U.S. farmer
sentiment, as indicated by the Purdue
University/CME Group Ag Economy Barometer, which fell 15
points from March to a reading of 99. Both subindexes of the
barometer also saw declines: The Current Condition Index dropped by
18 points to 83, while the Future Expectations Index fell by 14
points to 106. April marked the lowest farmer sentiment reading
since June 2022 and the weakest
current condition rating since May
2020. The sentiment decline was driven by worries regarding
the current financial situation on farms and anticipated financial
challenges in the coming year. The April Ag Economy Barometer
survey was conducted from April 8-12,
2024.
"Farmers' sentiment took a significant hit in April, reflecting
broader concerns about financial performance and farmland values,"
said James Mintert, the barometer's
principal investigator and director of Purdue
University's Center for Commercial Agriculture.
The Farm Financial Performance Index declined to 76 in April,
marking a 7-point drop from the previous month and a 21-point
decrease from last fall's peak of 97. This downturn reflects
farmers' growing concerns about the upcoming year's financial
outlook, with fewer respondents expecting better or equal
performance than last year.
Farmers' expectations regarding interest rates and farmland
values shifted in April's survey. Only 24% of respondents
anticipate interest rates rising over the next year, down from 32%
in March. Fewer farmers this month also said they expect to see
farmland values rise over the next year, despite the modest
improvement in their interest rate outlook, while more farmers
reported that they look for farmland values to hold steady. In the
April survey, just 29% of producers said they expect farmland
values to rise in the upcoming year, compared to 38% who felt that
way in March. These shifts reflect farmers' concern about farm
financial performance in 2024, outweighing their improved interest
rate outlook.
There is growing interest in using farmland for solar energy
production, and solar lease rates appear to be increasing. This
month's survey revealed a 7-point uptick in respondents reporting
discussions with companies about solar energy leases, reaching 19%
compared to 12% in March. Specifically, discussions around solar
leasing suggest demand for solar leases is increasing, with 58% of
farmers reporting lease rate offers exceeding $1,000 per acre — up from 54% in March. Over
one-fourth of respondents (28%) said they were offered a farmland
lease rate of $1,250 or more per
acre. Rising lease rates for energy production could be starting to
impact farmland values, at least in some areas. Among producers who
said they expect values to rise in the next year, 8% of respondents
highlighted energy production as a key reason.
"Looking ahead, energy production activities could provide some
support for farmland values and expectations in some regions," said
Mintert.
About the Purdue University
Center for Commercial Agriculture
The Center for Commercial
Agriculture was founded in 2011 to provide professional development
and educational programs for farmers. Housed within Purdue University's Department of Agricultural
Economics, the center's faculty and staff develop and execute
research and educational programs that address the different needs
of managing in today's business environment.
About CME Group
As the world's leading derivatives
marketplace, CME Group enables clients to trade futures, options,
cash and OTC markets, optimize portfolios, and analyze data —
empowering market participants worldwide to efficiently manage risk
and capture opportunities. CME Group exchanges offer the widest
range of global benchmark products across all major asset classes
based on interest rates, equity indexes, foreign exchange, energy,
agricultural products and metals. The company offers futures and
options on futures trading through the CME Globex platform, fixed
income trading via BrokerTec and foreign exchange trading on the
EBS platform. In addition, it operates one of the world's leading
central counterparty clearing providers, CME Clearing.
CME Group, the Globe logo, CME, Chicago Mercantile Exchange,
Globex, and E-mini are trademarks of Chicago Mercantile Exchange
Inc. CBOT and Chicago Board of
Trade are trademarks of Board of Trade of the City of Chicago, Inc. NYMEX, New York
Mercantile Exchange and ClearPort are trademarks of New York
Mercantile Exchange, Inc. COMEX is a trademark of Commodity
Exchange, Inc. BrokerTec is a trademark of BrokerTec Americas LLC
and EBS is a trademark of EBS Group LTD. The S&P 500 Index is a
product of S&P Dow Jones Indices LLC ("S&P DJI").
"S&P®", "S&P 500®", "SPY®", "SPX®", US 500 and The 500 are
trademarks of Standard & Poor's Financial Services LLC; Dow
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Futures contracts based on the S&P 500 Index are not sponsored,
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makes no representation regarding the advisability of investing in
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respective owners.
CME-G
About Purdue
University
Purdue University is a public research
institution demonstrating excellence at scale. Ranked among the top
10 public universities and with two colleges in the top four in
the United States, Purdue discovers and disseminates knowledge with a
quality and at a scale second to none. More than 105,000 students
study at Purdue across modalities and
locations, including nearly 50,000 in person on the West Lafayette campus. Committed to
affordability and accessibility, Purdue's main campus has frozen tuition 13 years in
a row. See how Purdue never stops in
the persistent pursuit of the next giant leap — including its first
comprehensive urban campus in Indianapolis, the new Mitchell E. Daniels, Jr.
School of Business, and Purdue Computes —
at https://www.purdue.edu/president/strategic-initiatives.
Writer: Morgan French,
mmfrench@purdue.edu
Source: James Mintert,
765-494-7004, jmintert@purdue.edu
Image
URL: https://www.purdue.edu/uns/images/2024/ageconomy-barometer2404LO.jpg
Image Caption: Farmer sentiment declines to lowest level since
June 2022 amid weakened financial
outlook. (Purdue/CME Group Ag Economy
Barometer/James Mintert)
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content:https://www.prnewswire.com/news-releases/farmer-sentiment-declines-to-lowest-level-since-june-2022-amid-weakened-financial-outlook-302135916.html
SOURCE CME Group