In a recent podcast discussing the results of the Ag Economy Barometer, James Mintert, the Director of the Center for Commercial Agriculture, highlighted some interesting trends when comparing future expectations to current conditions. He explained that while the overall index is relatively stable, there are some significant differences in farmers’ optimism about the future.
The Index of Future Expectations showed a 5 point increase from February, indicating that farmers are becoming more optimistic about their prospects. However, the Index of Current Conditions was 2 points lower than last month and 25 points below the same time last year. This suggests that farmers are still facing challenges in terms of high input costs, lower crop prices, and higher interest rates.
Mintert pointed out that breakeven projections are slightly lower than last year due to these challenges. Many inputs have already been purchased, and there are still concerns about potential fluctuations in fuel and labor costs. Michael Langemeier, the Associate Director of the Center for Commercial Agriculture, shared these concerns and emphasized that farmers need to be careful with their investments.
According to Mintert, the survey also asked farmers about their thoughts on making large investments and why they make those decisions. He noted that a significant shift has occurred in farmers’ perceptions about profitability prospects for their farms. The number of farmers citing poor prospects for farm profitability has increased significantly from about 7% last fall to 22% this month. This reflects a growing concern over a cost-price squeeze in the industry.
For more detailed information about the Ag Economy Barometer, including charts and responses to various questions, visit the link provided. Katie Dehlinger can be contacted at katie.dehlinger@dtn.com or you can follow her on social media at @KatieD_DTN
