By James Mintert and Michael Langemeier, Purdue Center for Commercial Agriculture
The Purdue University/CME Group Ag Economy Barometer recorded its lowest readings since March 2016 in September. Declining income expectations pushed farmer sentiment down as the barometer fell 12 points to 88, and the Index of Future Expectations dropped 14 points to 94. The Index of Current Conditions also fell 7 points to 76, which nearly matched levels seen in April 2020, during the height of COVID-19 concerns for farmers. This month’s survey was conducted from September 9-13, 2024.
September’s survey revealed that farmers are increasingly worried about commodity prices, input costs, agricultural trade prospects and the potential impact of the upcoming election on their farm operations. When asked to identify their top concerns for the coming year, low commodity prices and high input costs were nearly tied, with 34% of farmers citing input prices and 33% pointing to lower output prices as their primary concerns. Interest rates trailed behind as a top concern, chosen by 17% of respondents. Producers’ apprehensions about commodity prices matched up with their lack of confidence in the future of U.S. agricultural exports; only 26% of respondents expect ag exports to rise over the next five years, the most pessimistic response to this question since it was first introduced in 2019. Additionally, 78% of producers expressed concern that government policy changes following the fall 2024 elections could impact their farms.
The continued drop in the barometer reflects deepening concerns among farmers regarding expectations for farm income in 2024 and 2025. It’s notable that producer sentiment dropped back to levels last seen in 2016 when the U.S. farm economy was in the early stages of an economic downturn. In addition to commodity prices and input costs weighing heavily on their operations, producers are also facing considerable uncertainty about what lies ahead for their farms with the possibility of government policy changes following the upcoming 2024 elections.
