WEST LAFAYETTE, Ind. and
CHICAGO, Oct. 5, 2021 /PRNewswire/ -- The
Purdue University/CME Group Ag Economy
Barometer declined in September, down 14 points to a reading of
124. With producers feeling less optimistic about both current
conditions on their farming operations as well as their
expectations for the future, this is the weakest farmer sentiment
reading since July 2020 when the
index stood at 118. The Index of Current Conditions declined
12 points to a reading of 140 and the Index of Future
Expectations fell 16 points to a reading of 116. 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 between September 27-29, 2021.
The Farm Financial Performance Index was unchanged from
last month with a reading of 110. However, examining the detailed
responses reveals there was a shift among producers with regard to
their farms' financial performance. In September, fewer farms said
they expected their farms financial performance to match last
year's, while the percentages of producers expecting both worse and
better financial performance rose.
"Although the combined responses left the Farm Financial
Performance Index unchanged from a month earlier, the
increasing divergence in expectations among respondents from August
to September could reflect differences in how individual farms
managed risk in a period of rapidly fluctuating commodity prices,"
said James Mintert, the barometer's
principal investigator and director of Purdue
University's Center for Commercial Agriculture.
The decline in farmer sentiment spilled over into the Farm
Capital Investment Index, which declined 10 points to a reading
of 43, down 50% since the beginning of the year and the lowest
investment index reading since April
2020. Fewer farmers this month said they planned to increase
their machinery purchases than on the August survey as just 8% of
respondents plan to increase purchases, down from 10% last month.
In a follow-up question, over half (55%) of respondents reported
that their farm machinery purchase plans have been impacted by low
farm machinery inventories, likely contributing to weak sentiment
regarding whether or not now is a good time to make large
investments. Although plans for machinery purchases fell,
producers' plans for new construction rose this month with 13%
expecting to increase construction of grain bins and farm
buildings, up from 8% in August.
Producer concerns about rising input costs rose sharply this
month with over one-third of respondents saying they expect input
prices to rise by more than 12% in the coming year, which is six
times the average farm input inflation rate of the last decade.
Inflation expectations were higher this month across the board with
the percentage of respondents expecting input inflation to rise
above 12% doubling since July with an increase to 34%, up from 21%
last month.
Despite September's decline in farmer sentiment, farmers remain
bullish about farmland values. The Short-Term and
Long-Term Farmland Values Expectations Indices rose this
month, with the long-term index hitting a record high reading of
159, which is 4 points higher than the previous month. The
short-term index rose 9 points to 155, which is its third-highest
reading since data collection began in 2015. Additionally, about
one-half of corn/soybean growers continue to say they expect
farmland cash rental rates to rise above 2021 levels in 2022. Among
growers who expect cash rents to increase, 44% said they expect
rental rates to rise from 5 to less than 10%, and three out of ten
respondents indicated they expect rates to rise by 10% or more.
In early 2020, about 70% of producers expected agricultural
exports to increase over the next five years. Since then, farmer
expectations regarding future agricultural trade prospects have
continued to weaken with only a few exceptions. September recorded
the lowest percentage (37%) of growers expecting agricultural
exports to increase since the question was first posed early last
year. Concerns regarding the future of agricultural trade could be
another factor behind weakness in the Future Expectations
Index.
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 even more
information, check out the Purdue Commercial
AgCast podcast. It includes a detailed breakdown of each
month's barometer, in addition to a discussion of recent
agricultural news that affects farmers. Available now
at https://purdue.ag/agcast.
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. With a range
of pre- and post-trade products and services underpinning the
entire lifecycle of a trade, CME Group also offers optimization and
reconciliation services through TriOptima, and trade processing
services through Traiana.
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, EBS, TriOptima, and Traiana are
trademarks of BrokerTec Europe LTD, EBS Group LTD, TriOptima AB,
and Traiana, Inc., 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 &
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the case may be, and have been licensed for use by Chicago
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of their respective owners.
Writer: Torrie Sheridan,
765-494-6032, ward121@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: Farmer sentiment declines in September,
inflation expectations jump (Purdue/CME
Group Ag Economy Barometer/James
Mintert).
https://www.purdue.edu/uns/images/2021/ag-baromter921LO.jpg
CME-G
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SOURCE CME Group