Farmer sentiment Regarding the agricultural financial system took An monumental hit for the second month in a row in June.
The Purdue College/CME Group Ag Economy Barometer — based mostly on a month-to-month survey of 400 crop and livestock producers throughout the U.S. — declined sharply to a studying of 137 (relative to a baseline common index of 100).
The index measures farmer sentiment on current circumstances and future expectation. It dropped 21 factors from Might’s studying of 158, which was down 17 factors from April.
“I used to ben’t surprised it went down, however I used to be surprised it went down as a lot As a Outcome of it did,” said Jim Mintert, director of the Purdue Center for Enterprise Agriculture.
Michael Langemeier, affiliate director of The middle, said he thought the index may weaken Barely bit however not almost as a lot As a Outcome of it did.
“Given the strong prices, I assumed Which may maintain the index of current circumstances up there Barely bit. But clearly I used to be incorrect,” Langemeier said By way of The latest Ag Barometer podcast.
Corn and soybean prices have been nonetheless strong by historic requirements, however they have been weaker than a month earlier, Mintert said.
“I really feel that in all probability contrihowevered pretty a bit to the negativity … I in all probability underestimated how a lot that was impacting people’s perspective,” he said.
Langemeier said he assumes there are additionally underlying considerations about crop prospects in some parts of the Corn Belt and Good Plains.
“I simply assume this widespread notion of uncertainty and potential worth inflation is concerning to respondents,” he said.
The index of current circumstances fell 29 factors from 178 in Might to 149 in June, A pretty huge drop, Mintert said.
“The index of future expectations fell as properly, However it didn’t fall almost as a lot,” he said.
That index fell 17 factors from 149 in Might to 132 in June.
Producers’ view of their farm monetary efficiency was actually The driving strain with respect to current circumstances. That index fell from 126 in Might to 96 in June and fell 42 factors from April.
That’s An monumental drop in that monetary efficiency index and Barely surprising given the relative power in crop prices in contrast with prolonged-time period historic previous, he said.
“This one surprised me Greater than The fact that the index of current circumstances declined as a lot As a Outcome of it did,” Langemeier said.
There’s A lot of uncertainty about return prospects this fall, however they’re nonetheless pretty good. That leads him to marvel if producers are assumeing prices Aren’t going to be as strong this fall And by no means Nearly as good shifting into 2022 as they have been earlier in 2021, he said.
Mintert said it’s important To maintain in thoughts the survey is asking producers how they really feel Regarding their farm’s monetary efficiency And by no means asking them To take a Take A look at their stability sheet or projected income assertion.
He suspects the decline in commodity prices fueled the decline in sentiment and enhance in negativity and uncertainty relative to a month earlier.
Also having fun with into the decrease barometer studying are quickly rising manufacturing prices associated to shopper and farm enter worth inflation, enhanced money rental costs for farmland, enhanced labor prices And extremely effective prices for farm equipment