According to the Purdue University/CME Group Ag Economy Barometer, producer sentiment reached its lowest level since July 2022, falling 19 points to a reading of 104 in May. This decline was driven by drops in both the Index of Future Expectations and the Index of Current Conditions, reflecting concerns about the recent decline in crop prices.
Corn and soybean prices experienced significant drops, with corn falling over $0.50/bushel (10%) and soybeans declining over $1.00/bushel (8%) in mid-May. Wheat prices also saw a decline of nearly $0.50/bushel (8%) for June/July delivery compared to mid-April prices. These price decreases raised worries among farmers about their financial performance in the coming year.
The Farm Financial Performance Index dropped 17 points to a reading of 76 in May, indicating the impact of lower sentiment. Weakened crop prices, uncertainty surrounding U.S. bank failures, and rising interest rates contributed to this decline. Farmers expressed increased concerns about higher input costs and the risk of lower crop and livestock prices.
The Farm Capital Investment Index decreased by 6 points to a reading of 37, with 76% of respondents considering it a bad time for large investments. Rising interest rates and increased machinery and construction prices were cited as significant reasons for this sentiment.
Expectations for short-term farmland values also declined, with only 29% of respondents anticipating a rise over the next 12 months compared to 54% in the previous year. However, optimism remained for the longer-term outlook, as the Long-Term Farmland Value Expectations Index rose 3 points to a reading of 145.
Regarding the upcoming farm bill, crop insurance was identified as the most crucial aspect by 48% of respondents, followed by the Commodity Title at 25%. Corn and soybean growers expected higher reference prices for both crops under the Price Loss Coverage program.
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Categories: New York, Crops, Corn, Soybeans, Livestock