Lower crop prices, rising interest rates, high input prices, and uncertainty related to U.S. bank failures are all weighing on the minds of ag producers across the U.S. according to the latest survey from Purdue University’s Center for Commercial Agriculture.
“Producers are feeling the squeeze from weakened crop prices, which has reduced their expectations for strong financial performance in the coming year,” said Dr. James Mintert, Purdue University Professor of Agricultural Economics and Director of the Purdue Center for Commercial Agriculture.
According to a recent phone survey of 400 U.S. ag producers, 38% said they expect weaker financial performance for their farm this year, compared to just 23% who felt that way in April. Higher input cost remains the top concern among producers in the year ahead; however, concern over the risk of lower crop and/or livestock prices is growing. This month 26% chose lower output prices as their top concern, compared with just 8% who felt that way in September.
Meanwhile, nearly three-fifths (59%) of producers said they expect interest rates to rise during the upcoming year, and 22% chose rising interest rates as a top concern for their farm in the next 12 months. Additionally, 40% of farmers in this month’s poll said they expect this spring’s U.S. bank failures to lead to some changes in farm loan terms in the upcoming year, possibly putting more financial pressure on their operations.
In this month’s survey, just 29% of producers said they expect farmland values to rise over the next 12 months, compared to 54% who felt that way a year earlier.
With farm bill discussions ongoing, this month’s survey asked producers what title in the upcoming legislation will be most important to their farming operation. Nearly half (48%) of producers said the Crop Insurance Title will be the most important aspect of a new farm bill to their farms, followed by the Commodity Title, chosen by 25% of respondents. In a follow-up question, corn and soybean growers were asked what change, if any, they expect to see to the Price Loss Coverage reference prices in a new farm bill. Close to half (45%) of corn and soybean growers said they expect Congress to establish higher reference prices for both crops, with very few (10% and 13%) expecting lower reference prices for soybeans and corn, respectively.
Read the full Ag Economy Barometer report at https://purdue.ag/agbarometer.
Click below to hear Dr. James Mintert and Dr. Michael Langemeier as they discuss the latest Purdue Ag Economy Barometer survey in the Purdue Commercial AgCast.
