Farmer Sentiment Reaches Lowest Point Since June 2022

Farmer sentiment declined sharply in April, 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 declined: 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.

This month’s survey again included questions about leasing farmland for solar energy production. There was a noticeable uptick in the percentage of respondents who reported a discussion with a company in the last 6 months about leasing farmland for solar energy production. In April, that percentage rose 7 points to 19% of respondents, up from 12% in March.

Farmers who reported discussing solar leasing with a company were also asked about the annual lease rates they were offered. Fifty-eight percent of them reported a lease rate offer of over $1,000 per acre, up from 54% in the March survey. For the last two months, the solar lease rate question provided an additional breakout of the over $1,000 per acre category. Thirty percent of respondents in April said the lease rate they were offered ranged between $1,000 and $1,250 per acre, while 28% of farmers said they were offered $1,250 or more per acre.

Summary: Farmer sentiment weakened sharply in April as the Ag Economy Barometer fell 15 points to its lowest reading since June 2022. Farmers’ appraisal of their current situation and outlook for the upcoming year were much weaker than last month. Weaker sentiment translated into a less optimistic view of farmland values as fewer farmers said they looked for farmland values to rise over the next 12 months. Nineteen percent of respondents to this month’s survey reported discussing leasing farmland for solar energy production with a company, and 8% of farmers who look for farmland values to rise in the upcoming year pointed to energy production on farmland as a supporting factor.