Purdue survey finds farmers concerned about economy

(The Center Square) – The latest report out of Purdue University shows farmers are becoming increasingly worried about the present economic conditions.

This month’s Purdue University-CME Group Ag Economy Barometer dropped eight points from August to 115. The barometer is based on the survey of 400 agricultural producers conducted in mid-August.

“Farmer sentiment dipped in August with farmers weakening perception of current conditions on their farms providing the impetus for weaker sentiment,” the report stated.

Fueling that sentiment were expectations by a majority of farmers polled who believe interest rates will rise over the next year. Farmers also continue to be concerned about increasing farm machinery costs and construction costs.

More than a third of those polled said higher input costs were their biggest concern, while nearly a quarter felt the same about higher interest rates. The report noted that even though crop prices dropped sharply over the summer, only 1-in-5 felt it was the chief issue facing their farming operations.

More farmers, though, do believe the value of their farmland will rise over the next year. The Purdue survey found 39% expected their property values to rise, and that’s up 10 percentage points from May. Those expecting higher property values also outnumbered those anticipating prices to fall by a 3-to-1 margin.

When asked to look ahead over the next five years, nearly two-thirds of those polled believe property values will increase, compared to 12% who believe they will decline.

The report also found few corn and soybean producers have engaged in talks about capturing carbon on their farms. Just 6% of those growers said they have talked with businesses about receiving compensation for capturing carbon, and only 2% said they have accepted contract terms.

“Among the farms who engaged in discussions but chose not to sign a carbon contract, half of them said it was because the payment level was too low,” the report stated.

Nearly half of the farmers who have been offered payments said they were offered between $10 and $20 per metric ton, and almost a third said businesses proposed paying less than $10 per metric ton. That’s compared to just 5% who said they were offered at least $30.