{"id":14095,"date":"2024-02-06T10:25:00","date_gmt":"2024-02-06T14:25:00","guid":{"rendered":"https:\/\/ag.purdue.edu\/commercialag\/ageconomybarometer\/?p=14095"},"modified":"2024-02-05T11:35:21","modified_gmt":"2024-02-05T15:35:21","slug":"media-weakened-commodity-prices-cast-a-shadow-on-farmer-sentiment","status":"publish","type":"post","link":"https:\/\/ag.purdue.edu\/commercialag\/ageconomybarometer\/media-weakened-commodity-prices-cast-a-shadow-on-farmer-sentiment\/","title":{"rendered":"Weakened commodity prices cast a shadow on farmer sentiment"},"content":{"rendered":"\n<p style=\"font-weight: 400\">The most recent findings from the <a href=\"https:\/\/ag.purdue.edu\/commercialag\/ageconomybarometer\/\">Purdue University\/CME Group Ag Economy Barometer<\/a> reveal a downturn in farmer sentiment at the start of 2024.<\/p>\n<p style=\"font-weight: 400\">The January barometer fell to a reading of 106, eight points lower than in December. Producers expressed a more pessimistic perspective about their farms\u2019 current situation and future prospects. The Current Conditions Index fell 9 points, and the Future Expectations Index dropped by 7, both compared to December. The anticipation of weaker farm income in 2024 contributed to the overall decline, reflected in the Farm Financial Performance Index at 85, a 12-point decrease from the previous month. This month\u2019s Ag Economy Barometer survey was conducted from Jan. 15-19.<\/p>\n<div id=\"attachment_14096\" style=\"width: 310px\" class=\"wp-caption alignright\"><img loading=\"lazy\" decoding=\"async\" aria-describedby=\"caption-attachment-14096\" class=\"wp-image-14096 size-medium\" src=\"https:\/\/ag.purdue.edu\/commercialag\/ageconomybarometer\/wp-content\/uploads\/2024\/02\/AgEconomyBarometer_January2024-300x218.png\" alt=\"Weakened commodity prices cast a shadow on farmer sentiment (Purdue\/CME Group Ag Economy Barometer\/James Mintert)\" width=\"300\" height=\"218\" srcset=\"https:\/\/ag.purdue.edu\/commercialag\/ageconomybarometer\/wp-content\/uploads\/2024\/02\/AgEconomyBarometer_January2024-300x218.png 300w, https:\/\/ag.purdue.edu\/commercialag\/ageconomybarometer\/wp-content\/uploads\/2024\/02\/AgEconomyBarometer_January2024-1024x743.png 1024w, https:\/\/ag.purdue.edu\/commercialag\/ageconomybarometer\/wp-content\/uploads\/2024\/02\/AgEconomyBarometer_January2024-768x557.png 768w, https:\/\/ag.purdue.edu\/commercialag\/ageconomybarometer\/wp-content\/uploads\/2024\/02\/AgEconomyBarometer_January2024-1536x1115.png 1536w, https:\/\/ag.purdue.edu\/commercialag\/ageconomybarometer\/wp-content\/uploads\/2024\/02\/AgEconomyBarometer_January2024-2048x1486.png 2048w\" sizes=\"auto, (max-width: 300px) 100vw, 300px\" \/><p id=\"caption-attachment-14096\" class=\"wp-caption-text\"><strong>Weakened commodity prices cast a shadow on farmer sentiment<\/strong> (Purdue\/CME Group Ag Economy Barometer\/James Mintert)<\/p><\/div>\n<p style=\"font-weight: 400\">\u201cThe number of producers pointing to lower commodity prices and lower farm income in 2024 significantly influenced the decline across all indices,\u201d said <a href=\"https:\/\/ag.purdue.edu\/commercialag\/ageconomybarometer\/team\/jim-mintert\/\">James Mintert<\/a>, the barometer\u2019s principal investigator and director of Purdue University\u2019s <a href=\"https:\/\/ag.purdue.edu\/commercialag\/home\/\">Center for Commercial Agriculture<\/a>.<\/p>\n<p style=\"font-weight: 400\"><span style=\"font-weight: 400\">There was an increase in the proportion of producers anticipating a decline in financial performance for the upcoming year, with the figure rising from 20% in December to 31% in January. Concurrently, the percentage of those expecting income levels to remain stable decreased from 63% to 53%.<\/span><\/p>\n\n\n\n<p>\u201cFor the first time, the percentage of producers choosing lower commodity prices as a top concern matched the percentage of producers who chose higher input costs. This alignment indicates that U.S. farmers are worried about a possible cost\/price squeeze leading to lower farm incomes,\u201d Mintert said.&nbsp;<\/p>\n\n\n\n<p>The Farm Capital Investment Index fell to 35, 8 points lower than in December. This month, a shift occurred as fewer producers attributed their hesitation to make large investments to rising interest rates, which reversed a trend observed through much of 2023. Instead, more farmers cited high machinery and construction prices as reasons to defer investments. Meanwhile, among those deeming it a favorable time for large investments, an increased number pointed to expansion opportunities, while fewer referenced the rise in dealers\u2019 farm machinery inventories as a motivating factor for investment.&nbsp;<\/p>\n\n\n\n<p>This year, a greater number of producers expect their operating loan size to remain steady compared to last year, with fewer anticipating a larger loan. Of those expecting an increase, 61% cite rising input costs, down from 80% last year, while 23% attribute it to farm expansion, up from 15% in 2023.&nbsp;<\/p>\n\n\n\n<p>While the Short-Term Farmland Value Expectations Index declined to 115, indicating reduced optimism on the part of producers, the long-term index held steady at 150, suggesting enduring optimism. Notably, the proportion of producers anticipating a decline in farmland values for the upcoming year rose to 16%, up from 10% just three months ago, with a simultaneous drop in those expecting higher values from 35% to 31%.&nbsp;<\/p>\n\n\n\n<p>Additionally, the January survey reveals a consistent interest in carbon capture, as 8% of respondents reported engaging in discussions about carbon contracts. Among those, 61% were offered payment rates below $10 per metric ton and 12% were offered a rate of $30 or more per ton.<\/p>\n\n\n\n<p><strong>About the Purdue University Center for Commercial Agriculture<\/strong><\/p>\n\n\n<p>The\u00a0<a href=\"https:\/\/ag.purdue.edu\/commercialag\/home\/\">Center for Commercial Agriculture<\/a>\u00a0was founded in 2011 to provide professional development and educational programs for farmers. Housed within Purdue University\u2019s Department of Agricultural Economics, the center\u2019s faculty and staff develop and execute research and educational programs that address the different needs of managing in today\u2019s business environment.<\/p>\n\n\n<p><strong>About CME Group<\/strong><\/p>\n\n\n\n<p>As the world&#8217;s leading derivatives marketplace, CME Group (<a href=\"http:\/\/www.cmegroup.com\/\" target=\"_blank\" rel=\"noreferrer noopener\">www.cmegroup.com<\/a>)&nbsp;enables clients to trade futures, options, cash and OTC markets, optimize portfolios, and analyze data \u2013 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&nbsp;<a href=\"http:\/\/www.cmegroup.com\/trading\/interest-rates\/index.html\" target=\"_blank\" rel=\"noreferrer noopener\">interest rates<\/a>,&nbsp;<a href=\"http:\/\/www.cmegroup.com\/trading\/equity-index\/index.html\" target=\"_blank\" rel=\"noreferrer noopener\">equity indexes<\/a>,&nbsp;<a href=\"http:\/\/www.cmegroup.com\/trading\/fx\/\" target=\"_blank\" rel=\"noreferrer noopener\">foreign exchange<\/a>,&nbsp;<a href=\"http:\/\/www.cmegroup.com\/trading\/energy\/\" target=\"_blank\" rel=\"noreferrer noopener\">energy<\/a>,&nbsp;<a href=\"http:\/\/www.cmegroup.com\/trading\/agricultural\/\" target=\"_blank\" rel=\"noreferrer noopener\">agricultural products<\/a>&nbsp;and&nbsp;<a href=\"http:\/\/www.cmegroup.com\/trading\/metals\/\" target=\"_blank\" rel=\"noreferrer noopener\">metals<\/a>.&nbsp; The company offers futures and options on futures trading through the&nbsp;<a href=\"http:\/\/www.cmegroup.com\/globex\/index.html\" target=\"_blank\" rel=\"noreferrer noopener\">CME Globex<\/a>\u00ae platform, fixed income trading via BrokerTec and foreign exchange trading on the EBS platform.&nbsp; In addition, it operates one of the world&#8217;s leading central counterparty clearing providers, CME Clearing.&nbsp;<\/p>\n\n\n\n<p>CME Group, the Globe logo, CME, Chicago Mercantile Exchange, Globex, and, E-mini&nbsp;are trademarks of Chicago Mercantile Exchange Inc.&nbsp; CBOT and Chicago Board of Trade are trademarks of Board of Trade of the City of Chicago, Inc.&nbsp; NYMEX, New York Mercantile Exchange and ClearPort are trademarks of New York Mercantile Exchange, Inc.&nbsp; COMEX is a trademark of Commodity Exchange, Inc. BrokerTec and EBS are trademarks of BrokerTec Europe LTD and EBS Group LTD, respectively.&nbsp;The S&amp;P 500 Index is a product of S&amp;P Dow Jones Indices LLC (\u201cS&amp;P DJI\u201d). \u201cS&amp;P\u00ae\u201d, \u201cS&amp;P 500\u00ae\u201d, \u201cSPY\u00ae\u201d, \u201cSPX\u00ae\u201d, US 500 and The 500 are trademarks of Standard &amp; Poor\u2019s Financial Services LLC; Dow Jones\u00ae, DJIA\u00ae and Dow Jones Industrial Average are service and\/or trademarks of Dow Jones Trademark Holdings LLC. These trademarks have been licensed for use by Chicago Mercantile Exchange Inc. Futures contracts based on the S&amp;P 500 Index are not sponsored, endorsed, marketed, or promoted by S&amp;P DJI, and S&amp;P DJI makes no representation regarding the advisability of investing in such products. All other trademarks are the property of their respective owners.<\/p>\n\n\n\n<p>Writer: Erin Robinson,&nbsp;<a href=\"mailto:erobin@purdue.edu\">erobin@purdue.edu<\/a>&nbsp;&nbsp;&nbsp;<br>Source: James Mintert, 765-494-7004,&nbsp;<a href=\"mailto:jmintert@purdue.edu\">jmintert@purdue.edu<\/a><\/p>\n\n\n\n<p>Media Contacts:<br>Aissa Good, Purdue University, 765-496-3884,&nbsp;<a href=\"mailto:aissa@purdue.edu\">aissa@purdue.edu<\/a><br>Dana Schmidt, CME Group, 312-872-5443,&nbsp;<a href=\"mailto:dana.schmidt@cmegroup.com\">dana.schmidt@cmegroup.com<\/a><\/p>\n\n\n\n<p>Related websites:<br>Purdue University Center for Commercial Agriculture:&nbsp;<a href=\"http:\/\/purdue.edu\/commercialag\">http:\/\/purdue.edu\/commercialag<\/a><br>CME Group:&nbsp;<a href=\"http:\/\/www.cmegroup.com\/\">http:\/\/www.cmegroup.com\/<\/a><\/p>\n\n\n\n<p>Photo Caption:\u00a0<br>Weakened commodity prices cast a shadow on farmer sentiment\u00a0(Purdue\/CME Group Ag Economy Barometer\/James Mintert)<\/p>\n","protected":false},"excerpt":{"rendered":"<p>The most recent findings from the Purdue University\/CME Group Ag Economy Barometer reveal a downturn in farmer sentiment at the start of 2024. The January barometer fell to a reading of 106, eight points lower than in December. Producers expressed a more pessimistic perspective about their farms\u2019 current situation and future prospects. The Current Conditions&hellip;<\/p>\n","protected":false},"author":19,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":"","_links_to":"","_links_to_target":""},"categories":[7],"tags":[],"class_list":["post-14095","post","type-post","status-publish","format-standard","hentry","category-media"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.1 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Weakened commodity prices cast a shadow on farmer sentiment<\/title>\n<meta name=\"description\" content=\"Agricultural producers\u2019 sentiment increased for the second consecutive month, as the Purdue University\/CME Group Ag Economy Barometer index rose 5 points in November 2023.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" 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