WEST
LAFAYETTE, Ind. and CHICAGO, Dec. 6, 2022
/PRNewswire/ -- Unlike the two most recent presidential elections,
the November mid-term election outcomes did little to swing farmer
sentiment. The Purdue University/CME
Group Ag Economy Barometer came in at a reading of 102 in November,
unchanged from October. There was however a slight movement in both
of the barometer's sub-indices. The Current Conditions Index
declined 3 points to a reading of 98 while the Future
Expectations Index increased 2 points to a reading of 104. The
Ag Economy Barometer is calculated each month from 400 U.S.
agricultural producers' responses to a telephone survey. This
month's survey was conducted after the U.S. mid-term elections from
November 14-18.
"Even though sentiment remained relatively unchanged in
November, producers are continuing to look at their bottom line,"
said James Mintert, the barometer's
principal investigator and director of Purdue
University's Center for Commercial Agriculture. "Rising
interest rates combined with high input and energy costs are
creating a lot of uncertainty at the farm level."
The Farm Financial Performance Index improved modestly
this month to 91, up 5 points from October, but it remains 14%
below this same time period last year. While nearly one-third of
producers continue to express concern that their farms' financial
performance this year will be worse than the prior year, just over
two-thirds of producers expect their farms' 2022 financial
performance to be equal to or exceed 2021's. Still, high input
costs continue to weigh on producers' minds with 42% of respondents
in this month's survey citing that as their top concern in the year
ahead. Just over one-fifth (21%) of respondents chose rising
interest rates, while 14% cited input availability and declining
commodity prices as a top concern.
The Farm Capital Investment Index dropped back to its
record low of 31 in November, erasing gains from the previous
month. Nearly 80% of respondents indicated now is a "bad time" to
make large investments in farm machinery and of those, 47% chose
"rising prices of farm machinery and new construction" as the
primary reason. By comparison, only 10% of respondents felt now is
a "good time" to make large investments.
Given the sharp rise in energy prices that's taken place this
year, this month's survey asked producers how they've responded to
the cost increase. Just over a fourth (27%) of this month's
respondents indicated they've made changes in their operation
because of rising prices for energy. Of those who indicated they
made changes, 33% indicated they reduced tillage, 24% reduced
nitrogen rates and/or changed application timing, 11% increased
their use of no-till, and 8% said they reduced crop drying.
Farmland auction results in the Corn Belt continue to set new
record highs, yet producers show signs of becoming less bullish on
farmland values. The Short-Term Farmland Value Expectation
Index declined 4 points to a reading of 129 and the
Long-Term Farmland Value Expectation Index remained
unchanged at 144. Both indices are well below the highs established
in fall 2021. When asked to look ahead one year, 12% of respondents
this month said they expect values to decline compared to just 4%
who felt that way a year ago. Among producers who expect farmland
values to rise over the next 5 years, over half (52%) chose
non-farm investor demand as the primary reason for their
optimism
Read the full Ag Economy Barometer report at
https://purdue.ag/agbarometer. The site also offers additional
resources – such as past reports, charts and survey methodology –
and a form to sign up for monthly barometer email updates and
webinars.
Each month, the Purdue Center for Commercial Agriculture
provides a short video analysis of the barometer results, available
at https://purdue.ag/barometervideo. For more information,
check out the Purdue Commercial AgCast podcast
available at https://purdue.ag/agcast, which includes a detailed
breakdown of each month's barometer, in addition to a discussion of
recent agricultural news that affects farmers.
The Ag Economy Barometer, Index of Current Conditions and Index
of Future Expectations are available on the Bloomberg Terminal
under the following ticker symbols: AGECBARO, AGECCURC and
AGECFTEX.
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 and most diverse derivatives marketplace,
CME Group (www.cmegroup.com) 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 and EBS are
trademarks of BrokerTec Europe LTD and EBS Group LTD,
respectively. Dow Jones, Dow Jones Industrial Average, S&P
500 and S&P are service and/or trademarks of Dow Jones
Trademark Holdings LLC, Standard & Poor's Financial Services
LLC and S&P/Dow Jones Indices LLC, as the case may be, and have
been licensed for use by Chicago Mercantile Exchange Inc. All
other trademarks are the property of their respective owners.
Writer: Kami Goodwin,
765-494-6999, kami@purdue.edu
Source: James Mintert, 765-494-7004,
jmintert@purdue.edu
Related websites:
Purdue University Center for Commercial
Agriculture: http://purdue.edu/commercialag
CME Group: http://www.cmegroup.com/
Photo Caption: High input costs and rising interest rates
top concerns as farmer sentiment remains unchanged (Purdue/CME Group Ag Economy Barometer/James Mintert).
https://www.purdue.edu/uns/images/2022/ag-barometer1122LO.jpg
CME-G
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SOURCE CME Group