Farmer sentiment improves in August, however inflation worries rise

September 7, 2021

Farmer sentiment improves in August, however inflation worries rise

Farmer sentiment improves in August, however inflation fears are mounting (Purdue / CME Group Ag Financial system Barometer / James Mintert).
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WEST LAFAYETTE, Ind. and CHICAGO – The Purdue College / CME Group Agricultural Financial system Barometer improved in August, up 4 factors to a studying of 138. The modest enhance is attributable to enhancements in each sub-indices of the barometer. The Present Circumstances Index elevated 9 factors to 152 and the Future Expectations Index elevated 2 factors to 132. The Agricultural Financial system Barometer is calculated month-to-month from responses from 400 US agricultural producers to a phone survey. This month’s survey was performed from August 23-27.

In August, producers had a extra constructive outlook on their farm’s monetary scenario than at the beginning of the summer time. The agricultural monetary efficiency index rose 11 factors to 110, its highest worth since Could, as extra farmers indicated they anticipated higher profitability this yr in comparison with 2020.

“Though the costs of corn, soybeans and wheat have fallen in current weeks, farmers are extra assured of their earnings expectations for 2021,” mentioned James mintert, Principal Investigator of the Barometer and Director of the Heart for Business Agriculture at Purdue College. “Yield prospects stabilized or improved for a lot of producers in August as rainfall fell in areas that had been unusually dry and drought stricken. This helps clarify the development this month in farm monetary efficiency indices and present circumstances.

Producers are more and more involved in regards to the worth inflation of agricultural inputs. Within the August survey, 39% of these polled mentioned they anticipated enter costs to rise 8% or extra within the subsequent 12 months, up from 30% in June and July. One in 5 producers (21%) expects agricultural enter worth inflation to exceed 12% within the subsequent 12 months. Solely 13% of producers surveyed mentioned they anticipated the stress on enter costs within the coming yr to be in a variety of 0-2%, which might be much like the typical worth enhance. agricultural inputs over the previous decade.

The indices of anticipated short-term and long-term farmland values ​​each rose 4 factors in August from July, as producers stay optimistic that farmland values ​​will proceed to rise. On the similar time, about half of corn / soybean producers anticipate money rental charges for farmland to surpass 2021 ranges by 2022. Amongst producers who anticipate rents to rise in money, 44% mentioned they anticipate rental charges to drop from 5% to lower than 10%, with a 3rd of respondents saying they anticipate a charge hike of 10% or extra .

The agricultural capital funding index stabilized after 4 consecutive months of decline, up 3 factors to 53. The slight enchancment within the index might be attributed to the truth that fewer producers in August reported that they have been ‘They have been planning to scale back their farm development actions from a yr in the past. since. Farmers’ equipment buy plans reported within the August survey haven’t modified from these reported in July.

“Business experiences proceed to counsel that offer chain challenges are hampering farmers’ equipment buying plans and will additionally play a task in decreasing development exercise,” Mintert mentioned.

The August Barometer survey included a sequence of questions designed to study extra about producers’ use of canopy crops on their farms. Virtually two-thirds (65%) of respondents indicated that they at the moment use or have used cowl crops prior to now. Amongst producers who at the moment use cowl crops (41%), nearly half (47%) have began planting cowl crops prior to now 5 years, whereas 29% have planted cowl crops within the final 10 years. years or older. Most producers report solely planting cowl crops on a part of their farm space. Fifty-nine % of canopy crop customers reported planting cowl crops on 25% or much less of their whole space, whereas 10% of canopy crop customers reported planting cowl crops on 75% or much less. greater than their space. When requested why they select to plant cowl crops, the commonest responses (so as) have been to enhance soil well being, enhance erosion management, and enhance soil water high quality. Though the existence of carbon sequestration contracts requiring using cowl crops is a comparatively new phenomenon, 10% of canopy crop customers mentioned it was one of many causes they selected to plant cowl crops.

Learn the entire Agricultural financial system barometer in relation to https://purdue.ag/agbarometer. The positioning additionally affords extra sources – resembling previous experiences, charts, and survey methodology – and a kind to join month-to-month Barometer electronic mail updates and webinars.

Every month, the Purdue Heart for Business Agriculture affords a brief video evaluation of the barometer outcomes, out there at https://purdue.ag/barometervideo. For much more data, see the Purdue Business AgCast Podcast. It features a detailed breakdown of every month’s barometer, along with a dialogue of current agricultural information affecting farmers. Accessible now on https://purdue.ag/agcast.

The Agricultural Financial system Barometer, Present Circumstances Index and Future Expectations Index can be found on the Bloomberg Terminal below the next ticker symbols: AGECBARO, AGECCURC and AGECFTEX.

Concerning the Purdue College Heart for Business Agriculture

The Business Agriculture Heart was based in 2011 to supply skilled growth and education schemes to farmers. Based mostly throughout the Division of Agricultural Economics at Purdue College, the centre’s school and employees develop and execute analysis and academic packages that meet the varied administration wants in at present’s enterprise atmosphere.

Concerning the CME Group

Because the world’s main and most various derivatives market, CME Group (www.cmegroup.com) permits purchasers to commerce futures, choices, liquidity and over-the-counter markets, optimize portfolios and analyze knowledge, enabling market members all over the world to successfully handle dangers and seize alternatives. CME group exchanges supply the widest vary of worldwide benchmark merchandise in all main asset lessons primarily based on rate of interest, inventory market indices, alternate, power, agricultural manufacturing and metals. The corporate affords futures and choices on futures contracts via the CME Globex®, charge buying and selling through BrokerTec and forex buying and selling on the EBS platform. As well as, it operates one of many world’s main suppliers of central counterparty clearing, CME Clearing. With a variety of pre- and post-trade services that underpin all the lifecycle of a transaction, CME Group additionally affords optimization and reconciliation companies via TriOptima, and transaction processing companies. transactions via Traiana.

CME Group, the Globe emblem, CME, Chicago Mercantile Alternate, Globex, and E-mini are logos of Chicago Mercantile Alternate Inc. CBOT and Chicago Board of Commerce are logos of Board of Commerce of the Metropolis of Chicago, Inc. NYMEX, New York Mercantile Alternate, and ClearPort are logos of New York Mercantile Alternate, Inc. COMEX is a trademark of Commodity Alternate, Inc. BrokerTec, EBS, TriOptima and Traiana are logos of BrokerTec Europe LTD, EBS Group LTD , TriOptima AB and Traiana, Inc., respectively. Dow Jones, Dow Jones Industrial Common, S&P 500 and S&P are companies and / or logos of Dow Jones Trademark Holdings LLC, Normal & Poor’s Monetary Providers LLC and S & P / Dow Jones Indices LLC, as relevant, and have made licensed to be used by Chicago Mercantile Alternate Inc. All different logos are the property of their respective house owners.

Author: Kami Goodwin, 765-494-6999, [email protected]

Supply: James Mintert, 765-494-7004, [email protected]

Media contacts:

Aissa Good, Purdue College, 765-496-3884, [email protected]

Dana Schmidt, CME Group, 312-872-5443, [email protected]

Associated web sites:

Purdue College Heart for Business Agriculture: http://purdue.edu/commercialag

CME Group: http://www.cmegroup.com/

Agricultural communications: (765) 494-8415;

Maureen Manier, Head of Division, [email protected]

Agricultural information web page

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