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Audio Transcript

James Mintert: Welcome to Purdue Commercial AgCast, the Purdue University Center for Commercial Agriculture’s podcast featuring farm management news and information. I’m your host today, James Mintert, director of the Purdue Center for Commercial Agriculture, and joining me today is my colleague, Dr. Michael Langemeier who’s a professor of ag economics and also the associate director of the Center.

We’re going to review the the results from the June 2024 Purdue University- CME Group Ag Economy Barometer survey of farmers from across the nation. Each month we survey 400 farmers across the U. S. to learn more about their perspectives on the ag economy. This month’s Ag Barometer Survey was conducted from the 17th through the 21st of June.

 

[00:00:42] Barometer Drifts Lower

James Mintert: So Michael, the Ag Economy Barometer Index fell three points to a reading of 105. That leaves the index down 16 points compared to a year ago. A year ago at this time the index was sitting at a reading of 121. If we compare the first half of 2024, just average the results for the first 6 months of the year, and compare that to the first 6 months of 2023, the average reading so far this year is down about 11 percent in ’24 versus 2023.

So, first question Michael, are you surprised that the index, I’ll call it drifted lower, because a three point move is pretty small.

Michael Langemeier: No, there really wasn’t that much of that change from mid May to mid June. And, and, uh, it’s important to point out here, this was before the acreage report, of course, uh, there was some big changes on that, uh, that could impact a sentiment, but there really wasn’t that much that changed from mid May to mid June. So I was not that surprised.

And I think the, uh, the, the fact that it’s, it’s lower in the first half of ’24, uh, compared to the first half of 23, it’s really not all that surprising. Uh, when you look at it, when you look at, uh, net farm income forecast. Net farm income is expected to be quite a bit lower in ’24 compared to ’23.

James Mintert: Yeah, and I think producers have kind of adjusted their perspective with respect to what kind of a year ’24 is going to be. And I think we’re starting to pick up what people think that, what kind of a year 2025 might be as well.

And so, you know, if you look at the Current Condition Index, it was up one point compared to last month. I’m going to call that essentially no change. But that Current Condition Index is down 26 points compared to where it was a year ago at this time. Future Expectation Indexes, that’s the real reason the barometer fell because it dropped five points compared to a month earlier. And it’s down 11 points compared to where it was in 2023. Again, I think it just kind of reinforces what we’ve been seeing with the with the overall index, right? I mean, I think people do think that things are going to be worse or do feel like things are currently worse on their farm operations than they were this time last year. And there’s an expectation that They’re going to continue that vein sort of I mean, I think there’s still a little bit of that optimism hanging in the future which is why the future expectation was only down five points, but

Michael Langemeier: Yeah, that it’s very consistent with with some of the earlier period that we surveyed. If you go back to ’17, ’18 and ’19 and even even start of ’20, the Index of Future Expectations was higher than the Index of Current Conditions. And that’s where we’re at right now. And during that earlier period that I was mentioning there, our net returns were relatively low. And so producers were expecting things to improve. And that’s certainly where we’re at today. I think it’s also notable that the Index of Future Expectations has been less volatile the last several months than the Index of Current Conditions. That tells me that there They’re pretty uncertain where they think price might end up, uh, towards the end of ’24.

James Mintert: If you go back to essentially last summer. People were still relatively optimistic, especially if you go back all the way to maybe the fall of ’22. People were pretty optimistic about what was going on on their farm at that point in time.

And that Current Condition Index has just been drifting lower ever since then. And I think it’s useful to point out what a reading of 90 means. I think some, sometimes we kind of are a little cavalier with respect to what the numbers mean. So the index is built in a way that average conditions from the first six months we collected data, which is the fourth quarter of 2015, first quarter of 2016, averages out to 100.

So when you get a reading of 90 on that Current Condition Index, it says that people think that things are a little worse than they were in late ’15 early ’16 and for reference that was not a great time especially in crop agriculture, especially in the Corn Belt, right? So that tells you people are feeling the pinch, right? They’re feeling

Michael Langemeier: And You’re, you’re not quite as, quite as low as what we saw in, in May and June of 2020. But if we remember, that was when COVID hit and, and, and people were very pessimistic. We’re getting down into that territory.

James Mintert: Yeah. So there’s clearly some concerns about the current situation and people retaining some of that optimism going forward.

 

[00:04:59] Financial Performance

James Mintert: Now, having said that, the Financial Performance Index actually rose a little bit this month. Three point rise to a reading of 85. Last month, it was 82. Back in April, it was 76. One of the things you and I were talking about before we started recording today, Michael, is the fact that first of all, we’ve only been publishing this since the beginning of 2021. This index is relatively new. It’s not quite as old as some of the other data that we’ve collected. And so we have less observations to compare. But if you look In the last several years, you look back into the spring of ’21, the spring of ’22, the spring of ’23, and now the spring of ’24. There’s a tendency for that Farm Financial Performance Index to bottom out in the spring and then gradually improve into the summer and perhaps into the fall.

I wonder if that’s what we’re seeing this month because the small improvement of the Financial Performance Index doesn’t correlate well with what we saw in the Current Condition Index, right?

Michael Langemeier: Yeah, they’re not, certainly not one to one correspondence there. And so this, I think you’re right. I mean, even though we only have four years of data here, it does look like there, it does reach some lows there in that late spring.

James Mintert: There’s something going on here, I think, with respect to crop farmers in particular, who maybe, after a crop gets in the ground,

And they see growing conditions, maybe looking half reasonably good. They start to feel better about things. I, it’s a hypothesis. We don’t know what’s going on, but you can tell by looking at the chart that are certainly, certainly suggest there might be something going on with respect to seasonality there.

 

[00:06:37] Biggest Concerns

James Mintert: We continue to ask the questions, which is about, uh, farmer’s biggest concerns for their farming operation in the upcoming year. We’ve been asking this now for, I think, about a year and a half every month. And the responses haven’t changed very much. Um, the number one concern continues to be higher input cost.

And the way the question is phrased, it says higher input cost. I, I think this is a question where your anchor point really matters. And I think, you know, as an aside, we’re seeing this kind of stuff with respect to the U. S., the broader economy as well. Where’s your anchor point when you think about things like inflation?

Well, I think for a lot of farmers, the anchor point with respect to high input cost is what it costs to put a crop in the ground, what it costs to raise livestock before COVID.

Michael Langemeier: Yeah.

James Mintert: I think after we’ve kind of got this pre COVID and post COVID kind of thing going on, And input cost and break evens are so much higher now than they were pre COVID. I think that’s what we’re picking up with this respect to a concern about higher input cost, as opposed to a year to year change. I don’t really think that’s the issue here. That’s the number one concern.

Number two is the risk of lower crop and livestock prices, and it is followed very, very closely by the impact of rising interest rates.

And one of the things that’s interesting if you, for, for listeners, if you download the charts that go with this podcast, you can see this very clearly. The rising interest rates has become more important these last, uh, what, five months? Uh, that bottomed out at 18 percent of the people choosing that as a top concern back in, uh, what would that be, Michael? Five months ago, that was earlier in the year, late winter. Um, 23 percent this month. And it’s gone up every single month in between. I think there’s a little something there going on with respect to the impact of these higher interest rates starting to hit home.

Michael Langemeier: Yeah, there has to be, yeah. I think there is something going on there. And, and perhaps, perhaps this is just a hypothesis, perhaps some, one of the things that’s going on here is we had very strong liquidity, uh, you know, coming into ’24 and, and I think, I think during ’22 and ’23, uh, fewer people needed to borrow money for operating, uh, or borrow less money for operating than they typically do. And so maybe that’s what’s happening. They’re having to borrow a little bit more for, more money for 24 because liquidity is getting a little weaker again. And, and so maybe that’s part of what’s going on.

Maybe it’s, maybe it’s simply some of your fixed loans. Fixed loan contracts are, are gone now, are, are finishing and we’re moving to variable rate loans or something like that. But there’s definitely something going on.

James Mintert: It’ll be interesting to monitor that going forward and see if that continues to drift upward. I do feel like you just indicated, it is starting to impact the ag sector more than it was, for example, this time last year. Um,

 

[00:09:30] Farm Capital Investments

James Mintert: Farm Capital Investment index didn’t do much. Uh, I think it rose one point. So that’s pretty insignificant from a statistical perspective. So it’s a reading of 32. That’s just one point higher than the all time low of that index, which is 31. Um, it’s 10 points lower than it was this time last year. And you know, the follow up, uh, we’ve been asking people that say it’s a bad time to make investments, why do you feel that way? They continue to point to the same things, interest rates and the cost of machinery and buildings. Um, over time, interest rates have become more important relative to the cost of farm machinery and buildings. Um, but those are the two dominant factors, right? I mean, there’s really not a lot of new information there.

The one that’s maybe a little bit more interesting is the folks who say it’s a good time to make investments. We’ve been asking that question for about a year now. Um, hire dealer inventories was really kind of taken off as a key reason the last few months. It dropped back this month and just put that in perspective.

I think last month, in May, around 45 of the people in the survey chose that as a top reason for being a good time to invest. In April, I think it was a little under 40 maybe 37 or 38 percent. This month dropped back to 27 percent. It’s going to be interesting to see what happens that going forward. I I kind of feel like there could be a change in attitude here even among the folks that thinks it’s a good time.

What do you say?

Michael Langemeier: I think you’re I think you’re correct and and you’re going back to the Investment Capital Index. I just I just can’t think of something that would really change that in the next few months, unless there was some kind of world a supply shock of some sort. I just don’t see that changing

James Mintert: Yeah, and I guess the, well, the one thing that had changed this year was the fact that these dealer inventories was increasing and it was obvious whether you look at the data that’s published for the equipment manufacturers or whether you simply look at dealer lots around the country, you can see the increase in inventories taking place. And so people automatically start thinking about having a little more bargaining leverage, which is true, but you and I were talking about this earlier. I think initially we were thinking, well, people were thinking more, more dealer inventory. I can do, get a better deal on that tractor, combine or planter that I wanted. And now all of a sudden they’re saying, maybe I shouldn’t spend the money on that.

Michael Langemeier: Yeah, I think that’s what’s happening. This is not a good signal obviously for dealers The fact that there’s inventories out there, but fewer people are citing this as a reason to invest in machinery.

James Mintert: Yeah, it’s not a good sign for dealers. It’s not a good sign for the manufacturers either. And of course, we’ve seen the news reports with manufacturers cutting back on their production levels to accommodate the fact that these inventories are rising. It’s going to be interesting to see how this goes. As we move forward, if we get some different responses, but. And the other thing you and I were talking about, uh, you know, a lot of our questions we give people an out, which is we give, uh, the way these questions are phrased, we ask the question and then we give, since it’s a phone survey, we give people the opportunity to choose among answers that we’ve predetermined.

So the answers we gave on this one are strong cash flows, opportunities to expand the farm, invest in new technology, and hire dealer inventories. And then the out, you know, the, the escape mechanism here is if you don’t like one of those, you choose other. It’s interesting to me that given the categories we listed, 27 percent of the people in the survey, this month’s chose other. Uh, and that number doesn’t change a whole lot. It’s, it’s ranged from a little under 20 percent to I think one month that was right at 30%. What are we missing?

Michael Langemeier: Yeah. That’s very interesting. And, and in fact that for the last several months here, I’m going back all the way back, all the way back to the beginning of, of ’24, that number has been higher, uh, than things like invest in new technology and opportunities to farm. So I, I just, I can’t think of what we’re missing. We’re gonna have to do some more brainstorming on this one.

James Mintert: Yeah. One of the questions I think a lot of people in the industry have is, is the new technology a motivation, a major motivation to invest? And we do get some people that say that it is, um, this month it was 13%. Last month it was really small. Um, I think it was less than five percent. Um, other months it’s usually in the low teens. That’s not what really drives the investment decision apparently. Is that, do you agree with that?

Michael Langemeier: Yeah, I, and it’s also a bit surprising to me that the opportunities to expand the farm, that really is a fairly small number. It did go up to 17 percent here in June, but that was running 10 percent or below in April and May.

When we do the question related to farm growth, we usually see that 50 percent of the people, 50 percent of the respondents are growing their operations. So, it’s surprising to me that that number’s not a little bigger. Of course, when you say expand, a lot of times you can expand without increasing your machinery in a major way. And so perhaps that’s what’s going on.

James Mintert: And then I guess the other thing that’s, that’s well worth pointing out, Michael, is, um, when we started asking this back in the summer of ’23, the first couple of times we asked it July and August, roughly 40 percent of the people who said it was a good time to make investments said it was because they had strong cash flows. That has dropped precipitously. Uh, this month, 17%. So it’s been, it’s been cut in half or a little more than cut in half. Uh, not many people feel like cash flows are a prominent reason for making those investments. So that, again, just points to the tightening that’s taken place in production agriculture.

 

[00:15:12] Farmland

James Mintert: Let’s talk about farmland a little bit. The Short- Term Farmland Value Expectation Index at 115 was unchanged from a month ago, but it’s 11 points lower than, than, uh, this time last year. And if you look at the raw responses, I think it tells a little bit of a story here. The raw responses to the question, which are what do you think is going to happen to farmland values in your area in the next 12 months. The percentage of people who think farmland values are going to decline, rose. The percentage of people who think farmland values are going to go up, rose. And that’s why the index didn’t change. But I think when I look at the chart, it looks to me like there’s just a lot of uncertainty out there. What do you think?

Michael Langemeier: I think that, I think that’s, that’s, that’s a very good point. I think that’s probably what’s going on. And, and just for, uh, uh, just for reference here, uh, this index has been above 100, uh, ever since, uh, uh, late 2020. Uh, and so as we get closer to 100, let’s say people remain fairly pessimistic as we get closer to a hundred down the road here. It’s been a long time since we’ve been at a hundred. And I’m not suggesting we’re heading there necessarily, but just as a point of reference.

James Mintert: Yeah, it’s, you know, when you look at this chart of the raw responses, going back to, uh, late ’21, that’s when the percentage of people who think farmland values is going to go down, bottomed out, at, I don’t know, 3 or 4 percent.

Michael Langemeier: Yeah, it was really low.

James Mintert: Excuse me. We’re up to 17%. It’s been as high as 19.

Michael Langemeier: Yeah,

James Mintert: We’re getting close to its peak.

Michael Langemeier: It’s been above 10 really, for two years now.

James Mintert: So it’s, it’s kind of interesting to watch that, uh, going forward. I think sometimes there’s a little more information in the raw responses than there is in the, in the index itself.

Uh, the long term index after hitting, uh, almost an all time peak, it didn’t quite get to the peak last month. Uh, did drop back seven points this month to read at 152. And again, if you look at the. underlying responses to the question. Um, what really happened was there was no change in the percentage of people who say lower farmland values, but what happened was the percentage of people who say it’s going up did drop back and that caused the index to, to, uh, to back off a little bit. I don’t know what to make of that. Michael, what do you think? Anything?

Michael Langemeier: This index doesn’t change all that much, and so this was a bigger change than we’ve seen in some months, but I wonder if last month was perhaps an outlier, because certainly where we’re at now is consistent with where we were at from January through April.

James Mintert: Yeah. I mean, we were both surprised last month that the overall index was almost record high. Uh, that was a little bit of a surprise, and so maybe dropping back this month is

Michael Langemeier: And we’re still very, we’re still quite optimistic with respect to five farmland price expectations five years from now, uh, you know, compared to 2020.

James Mintert: Yeah. Yeah, good point.

Um, when we ask people about the main reason they expect farmland values to rise, the response to this question doesn’t change very much. Overall, people continue to point to non farm investor demand as being the reason they retain optimism about farmland values in kind of a long run perspective. Um, you know, if you think about some other factors, inflation is in there. I think when people are thinking about inflation, sometimes inflation and non farm investor demand, people have maybe a little bit of trouble differentiating between those two because one reason why non farm investors might choose to invest is inflation.

 

[00:18:48] Solar Energy Production & Carbon Capture

James Mintert: The more interesting part, for me anyway, in the last few months is we’ve included a new category in this question, in the responses, and that is energy production. And, April was the first time we included that. Eight percent of the people in the survey who think farmland is going to go up in value over the next five years said it was because of energy production. They’re thinking about solar energy predominantly and perhaps wind energy as well. In May it was 12 percent. In June it was 10 percent. So if you average out that across those three months, basically one out of ten people say energy production. Thinking about this being a nationwide survey, does that surprise you?

Michael Langemeier: The ten, I didn’t think it would be ten percent. Uh, or, you know, it would range from, like you said, from eight to twelve percent the last three months when we’ve asked this question. I didn’t think it would be that high. I knew it would be, I knew it would be positive, maybe five percent or something, but I didn’t think it would be at ten percent.

James Mintert: Yeah, the, the 1 out of 10, on average

Michael Langemeier: Because, like you said, this is nationwide. I mean, we’re seeing a lot of activity here in Indiana, but this is nationwide.

James Mintert: Yeah, there’s clearly some hot spots for energy production on farmland. But yeah, the nationwide aspect of this has kind of got me a little bit befuddled. And I think one of the issues for us is we don’t have a good grip on how many acres have been contracted. For example, here in Indiana or the Eastern Corn Belt. We know that there’s quite a few acres that are under contract where no activity’s taken place. We don’t have a good grip on how many acres are actually under contract. So, this is suggesting there’s quite a bit of activity under the surface that we’re not seeing. Yeah, that you can’t pick up by, by visual traveling around the country.

Um, We’ve been asking people about leasing farmland for solar energy production specifically and we changed the question here in 2024 to focus on recent activity because we were concerned we might be picking up some historical activity. So now it says, have you actively engaged in discussions with any companies about leasing farmland you own for the installation of a solar energy project to generate electric, generate electricity in the last six months. This month, 16 percent said that they’d had a discussion in the last six months. Last month, it was 20 the month before that it was 19%. And then the first couple of times in 2024, we were lower. It was 10 percent in 20 in February, 12 percent in March. Um, again, Sixteen percent on a nationwide survey have some kind of a discussion about leasing farmland for solar energy production. Surprised?

Michael Langemeier: No. Given that we were 20% last month, I’m not, but when we first started asking this question, I didn’t think we’d get to 15 to 20%.

James Mintert: Yeah. Again, we’re, we’re, we talk to a lot of folks in the Eastern Corn Belt, and there’s definitely quite a bit of activity in the Eastern Corn Belt .Here in Indiana, for example. But we know there’s other parts of the country where there’s not much, or we don’t, well, we don’t think there’s much going on. Maybe there’s more going on. Our survey would suggest there’s more going on than maybe

Michael Langemeier: I mean, both of us worked in Kansas for a while. And I’m from Nebraska. I don’t hear near as much discussion out there.

James Mintert: Yeah. So interesting. So the other thing we’ve been doing is following the rates that are being offered, and this is really interesting. So, the question is, what is the annual payment rate per acre you are offered to lease some of your farmland for the installation of a solar energy project to generate electricity? Um, again, this is focused on people in recent months, focused on people who have had a discussion in the last six months. So, again, we’re trying to get away from any historical, you know, long time ago kind of responses.

The interesting, well, two interesting things in this chart. First of all, The percentage of people who say they were offered less than 500 an acre has dropped sharply. First time we asked this was back in June of ’21. Roughly a third of the people, uh, said that they were offered less than 500 an acre. That’s been going down in recent months here in 2024, and on this survey, 8 percent said less than 500. On the other end, the first time we asked this question where we had 1, 000 an acre or more again was June of ’21 and roughly one out of four, 27 percent said they were offered over $1,000. This month, 69%, almost 70%, said they were offered over 1, 000 dollars an acre. This, it’s kind of striking when you look at the chart. You can really see how the movement has taken place away from these lower rates towards the higher rates, right?

Michael Langemeier: Definitely, and it just shows you how strong the demand really is.

James Mintert: Yeah, the question that we’ve, I think, both gotten from some people in the press is, is this kind of a supply driven thing in the sense that farmers are seeking out energy companies to offer their farmland for solar energy? Or is it energy companies bidding up the price because they are perceiving that they’ve got strong demand for solar energy.

The charts are telling us unequivocally it’s, it’s demand, right? Demand for solar energy, for a variety of reasons, has been going up. And then this month we did, we broke down the categories for rates, uh, one additional bucket. Uh, so our new highest bucket is the category of 1, 500 dollars an acre or more, uh, for solar energy. And one out of four, approximately, 27 percent said they were offered 1, 500 per acre or more. That surprised me. I knew enough to know that there were some people being offered rates above 1, 500 because we’d heard about it. I didn’t expect it to

Michael Langemeier: No, I didn’t think it’d be 27%.

And just, just to remind those that are not as familiar with the, with the rental market as, as other people, this is several multiples of cash rent.

James Mintert: Yeah. unequivocally, right? That’s a good point. And the other point is, we’ve talked about this in the past, but we suspect that some of the lowest rates that are being offered, those less than 500, are probably in areas of the country where farmland cash rental rates are pretty low. Because that’s kind of the point of comparison.

And then, uh, I think one chart I put in is to kind of provide some perspective. Looking at the percentage of respondents who said that they were offered a thousand dollars an acre per more or more, uh, for solar energy. I just aggregated that for every time we’ve asked the question and put it all on one chart. And it really shows the upward trend that took place. It’s been not every single time we asked the question, but clearly if you draw a trend line, it goes from that 27 percent who said they were offered a thousand dollars an acre or more back in ’21, uh, June of ’21, up now to that 69 percent and it’s, it’s pretty steady. It doesn’t go up every month or every time we ask the question, but it’s pretty steady.

Michael Langemeier: I encourage listeners that are that are really interested in this topic to take a look at these charts in particular this one, because I’ll just point out a couple, a couple different months here in April ’23, we didn’t do something later in ’23. So that’s the latest in ’23 that we have, 46 percent said they were offered a thousand dollars or more. This month that was 69%. That’s, that’s one year. That’s like, that’s about a one year. So that huge increase in the number of contracts that are over a thousand dollars now, cash rent hasn’t changed that much. Okay.

James Mintert: Yeah.

Michael Langemeier: So again, it’s the demand.

James Mintert: So we did, uh, we’ve been kind of trying to figure out a little more on, uh, carbon capture and storage, and we’ve had some trouble asking the questions appropriately, so we keep kind of tinkering with the questions, so this month we did ask a question about, have you been approached, uh, and had a discussion with a company, more specifically an ethanol plant, about, uh, carbon capture, utilization, and storage, Um, and the idea is that there’s a number of ethanol plants that are looking for ways to decarbonize effectively, um, to qualify their fuel, uh, as, as more of a green fuel.

And it’s scattered, right, and partly driven by proximity to these ethanol plants. So in some respects, there’s not nearly as many people that might be eligible for this. Having said that, 8 percent of the people in the survey said they’d had a discussion about carbon capture utilization and storage. Um, and the question specifically said related to an ethanol plant. We don’t know for sure if everybody interpreted that the way we intended or not, but still, 8%? Um, Nationwide survey? I guess I thought that was a lot.

Michael Langemeier: Yeah. You, you given it’s a nationwide survey and I, I, I, I haven’t talked to people in the Western corn belt about, about this particular issue, but, but I know I’ve, I’ve, I’ve met several people in Indiana that have been, that have been approached. Uh, so I, I know it’s happening here in the Eastern corn belt, but why we ask these questions, because we really don’t know until we ask the question how common this really is.

James Mintert: We’ll continue to ask questions on this and see if we can learn some more. The related point that people have asked us about, so this is why we surveyed it, um, what are the payment rates?

And, uh, we’ve asked this now a couple of times, and we, again, we’ve had a little trouble, uh, maybe conveying what we’re asking, uh, in a, in a phone survey. But for people who said they’d had a discussion, the follow up question was, what was the payment rate per acre you were offered? And the vast majority, 93%, said it was less than, than $25 an acre. Um, there were some people, though, and we’ve heard some other reports outside the survey, of higher rates. Uh, 4 percent said 50 to $75 per acre, another 4 percent said 75 or more per acre, and we’ve heard some reports, um, on an individual basis outside the survey that were, um, I think over 100 an acre.

Michael Langemeier: Yes.

James Mintert: I think there’s a lot of variability in this market. Um, in some respects, we saw some of this in the early days of solar.

Michael Langemeier: Yes, I think this is an infant market. I don’t know if that’s the right terminology, but it’s a very new market and we’re still feeling our way.

James Mintert: Yeah, it’s an immature market, right? And nobody knows what the equilibrium value is, right? And then, I think the related point might be the fact that the rate you’re offered could vary substantially depending on your location relative to an ethanol plant. Um, there’s a lot of logistical issues and, and I don’t pretend to know all of them. I don’t, maybe I probably don’t even know half of them, I suppose. I suspect there’s just, there’s probably going to continue to be variability in this rate, but I think, uh, it’s a little like solar early days. Um, I think the companies are trying to figure out what’s it going to take to get people interested.

Michael Langemeier: Or what it’s worth.

James Mintert: Yeah.

Michael Langemeier: That’s still an open question. How much is this worth?

James Mintert: Well, I think from the landowner’s perspective, you want to try and figure out what it’s worth to, to the, to the ethanol plant. From the ethanol plant perspective, they’re just trying to figure out what rate do we have to offer to get people interested, right?

Michael Langemeier: Yeah.

James Mintert: And that’s a classic case of those two converging at some point in the future to an equilibrium rate. I don’t think we’re there yet.

Michael Langemeier: No, we’re not there yet.

James Mintert: I don’t think we have any idea what the equilibrium rate is, so. Uh, so we’ll continue to collect data on that because it’s a really interesting topic.

So, that wraps up our discussion for today. Uh, you can get the full report on our website, purdue.edu/agbarometer. And of course, the slide deck that we were discussing while we were doing the podcast is available to download as well. And that’s available on our website purdue.edu/commercialag. So with that, I want to thank my colleague, Dr. Michael Langemeier, for joining me today. And on behalf of the Center for Commercial Agriculture, I’m Jim Mintert.