WEST LAFAYETTE, INDIANA, US — US farmer sentiment took a nosedive in August, mirroring levels seen in 2015-16, during the early stages of a significant downturn in the farm economy, according to the Purdue University/CME Group Ag Economy Barometer.
The monthly survey of farmers, taken from Aug. 12-16, saw an overall reading of 100, a drop of 13 points from July. Weakening farm income prospects weighed on farmers’ sentiment as the outlook for a bountiful fall harvest was more than offset by declining crop prices.
“Weakness in the barometer and related indices provide a signal that farmers are concerned about the possibility of extended weakness in farm incomes, similar to what took place from 2015 to 2019,” said James Mintert, the barometer’s principal investigator and director of Purdue University’s Center for Commercial Agriculture.
The Index of Current Conditions also dropped 17 points to 83, while the Index of Future Expectations decreased by 11 points to 108.
Farmers’ primary concerns shifted in August, with 30% citing commodity prices as the top worry. Last year, only 20% said weak commodity prices were a top concern.
However, concerns about rising interest rates have lessened, with only 17% of farmers mentioning this issue, down from 24% last year.
The Farm Financial Performance Index dropped 9 points from July’s survey and 14 points from a year ago, reaching its lowest level since July 2020, when there was widespread uncertainty from COVID-related lockdowns. The decline in financial performance reflects ongoing concerns about weak financial conditions, according to the survey.
“Farmers have also become less optimistic about farmland values this summer than in recent years,” Mintert said. “The percentage of farmers who think farmland values could decline within the upcoming year has been rising, which is consistent with the weak outlook for financial conditions. The weak capital investment index reading suggests farmers are going to pull back on capital expenditures.”
