Farmer Sentiment Improves in July
All three broad-based measures of farmer sentiment improved in July. The Purdue University-CME Group Ag Economy Barometer Index rose 8 points to 113. At the same time, the Index of Current Conditions increased by 10 points to 100, and the Index of Future Expectations at 119 was 7 points higher than a month earlier. July’s sentiment improvement occurred even though prices for both corn and soybeans declined from the time survey responses were collected in June to July. For example, Eastern Corn Belt cash prices for corn and soybeans declined 11% and 5%, respectively, from mid-June to mid-July.
When asked about their biggest concerns in the year ahead, the top choice among producers once again was high input costs, chosen by 34% of respondents. However, weak commodity prices were also on producers’ minds, as 29% of producers in the July survey pointed to the risk of lower crop and livestock prices as a top concern, up from 25% of respondents in June. Only 17% of respondents cited rising interest rates as a top concern, down from 23% in June, consistent with signals from the Fed that interest rates have peaked.
The Farm Financial Performance Index weakened by 4 points in July to 81, leaving the index 6 points lower than a year earlier. July’s decline followed back-to-back improvements in the index in May and June. The index’s fall reflects farmers’ concerns about the impact of weakening commodity prices combined with high input prices. Although the cost of production for principal crops, including corn and soybeans, has fallen year-to-year, output prices have declined even more, raising the possibility of a cost-price squeeze for U.S. crop producers.
Farmland leasing discussions for the 2025 crop year are starting to take place across the nation. This month’s survey asked farmers who grow corn, soybeans, wheat, or cotton what their expectations are for cash rental rates in their area. Nearly three-fourths (72%) of farmers who responded to the July survey said they expect cash rental rates to remain about the same as in 2024. The remaining respondents’ views on cash rental rates were split almost evenly between those who expect rates to rise (15%) vs. those who expect rates to fall (13%).
Source: Ag.Purdue.edu