WEST LAFAYETTE, INDIANA, U.S. — Agricultural producer sentiment dropped to its lowest level since October 2016 as producers expressed concern over worsening farm financial conditions, according to the latest Purdue University/CME Group Ag Economy Barometer report.
The September barometer reading was 114, down 15 points since August. Large declines were seen in the barometer’s two sub-indices, the Index of Future Expectations, which fell 10 points and the Index of Current Conditions, which fell 25 points, both compared to their respective August readings.
“Producers indicated that financial conditions on their farms deteriorated significantly as 2018 unfolded and their expectations for the future weakened as well,” the report said.
In September, 54% of farmers surveyed said their farm’s financial condition was worse than a year earlier, up from 38% that felt that way in June. Also, on the September survey, 33% of producers said they expect their farm’s financial condition to be worse a year from now, up 15 points compared to responses received to the same question in June.
“The negative outlook was also evident when producers were asked for their perspective on whether now is a good time to make large investments in farm machinery and buildings for their farming operation and on next year’s farmland cash rental rates,” the report said.
In September, 78% of respondents said it was a bad time to make large investments and just 20% said it was a good time to invest, the lowest combined reading on large farm investments since the barometer launched in October 2015.
Farmers also indicated that worsening farm financial conditions could weigh on farmland cash rental rates in 2019 as nearly two-thirds of farmers surveyed said they expect to see lower cash rental rates for farmland next year.