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Thursday, July 11, 2024

Farmer sentiment drops 3 factors in June

Farmer sentiment declined in June, with the Purdue/CME Group Ag Financial system Barometer index studying dropping to 105, three factors decrease than the earlier month. The decline was attributed to a five-point drop within the Index of Future Expectations, which fell to 112, whereas the June Present Circumstances Index elevated barely to 90. James Mintert, the barometer’s principal investigator and director of Purdue College’s Middle for Industrial Agriculture, mentioned, “Rate of interest threat and excessive breakeven ranges, mixed with considerations that crop and livestock costs may weaken, are holding again producer sentiment and making them cautious about making giant investments.”

The Farm Capital Funding Index additionally fell, declining by three factors to a studying of 32, only one level above its historic low.

Extra producers indicated this month that now will not be a positive time for big investments in comparison with Could, though the share of producers who seen it as time remained unchanged. The Lengthy-Time period Farmland Values Index dropped to 152, down seven factors from Could. Fewer producers anticipate farmland values to extend over the subsequent 5 years, with an increase in these anticipating values holding regular.

Farmer sentiment survey insights

Amongst these anticipating long-term will increase, 57% attributed their confidence to nonfarm investor demand and 16% to inflation. The survey additionally explored respondents’ curiosity in carbon seize and storage tasks launched by ethanol vegetation.

Eight p.c of respondents reported being approached about such tasks, with the bulk (93%) noting they acquired fee presents for lower than $25 per acre and solely 8% receiving presents exceeding $50 per acre. Discussions about leasing farmland for photo voltaic power manufacturing have been reported by 16% of respondents, a slight decline from April and Could surveys. Nevertheless, lease charges confirmed an upward development, with 69% of respondents being provided long-term charges of $1,000 per acre or greater, in comparison with 27% in June 2021.

Notably, 27% of respondents acquired presents of $1,500 per acre or extra, and 58% of leases included an annual escalator clause, usually between 2% and three% per yr.

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