WEST LAFAYETTE, INDIANA, US — High input costs, the risk of lower prices for their products and rising interest rates continue to be a concern for US farmers, contributing to a 3-point drop in the Purdue University/CME Group Ag Economy Barometer in June.

The monthly survey of farmers, taken from June 17-21, saw an overall reading of 105. The Index of Future Expectations fell 5 points to 112 while the Current Conditions Index increased 1 point to 90.

“The impact of rising interest rates on their farm operations has become a bigger concern for producers in recent months,” said James Mintert, the barometer’s principal investigator and director of Purdue University’s Center for Commercial Agriculture. “Interest rate risk and high breakeven levels combined with concerns that crop and livestock prices could weaken are holding back producer sentiment and making producers cautious about making large investments.”

This month’s Farm Capital Investment Index declined by 3 points to a reading of 32, just one point above its historical low. More producers indicated this month that it is not a favorable time for large investments compared to May, while the percentage of producers who viewed it as a good time remained the same.

The June survey also asked respondents interest in carbon capture and storage projects introduced by ethanol plants. Eight percent of respondents said they had been approached about such projects, with most (93%) noting they received payment offers for less than $25 per acre. Less than 8% received offers of more than $50 per acre.

Additionally, 16% of respondents reported discussions taking place within the last six months about leasing farmland for solar energy production, a slight decline from April and May survey responses. However, lease rates continued an upward trend, with 69% of respondents being offered long-term rates of $1,000 per acre or higher, compared to 27% in June 2021. Notably, 27% of respondents received offers of $1,500 per acre or more, with 58% of leases including an annual escalator clause, typically between 2% and 3% per year.