Producer sentiment fell to its weakest reading since July 2022, as the Purdue University/CME Group Ag Economy Barometer Index declined 19 points (15.4%) to a reading of 104 in May. The Index of Future Expectations declined 22 points (18.3%), while the Index of Current Conditions fell 13 points (10.1%). Crop price weakness triggered much of the sentiment decline.
The Farm Financial Performance Index plunged 17 points (18.3%). Falling commodity prices were a key factor behind the decline as 38% of this month’s respondents said they expect weaker financial performance for their farm this year compared to just 23% in April. Putting additional pressure on farmers’ profit prospects are expectations for higher interest rates in the upcoming year. Although producers’ interest rate projections have moderated somewhat, 59% of respondents still said they expect interest rates to rise during the upcoming year and 22% chose it as a top concern for their farm. Additionally, 40% of farmers in this month’s poll said they expect this spring’s U.S. bank failures to lead to some changes in farm loan terms in the upcoming year, possibly putting more financial pressure on their operations.
When asked what will be important to them in a new Farm Bill, nearly half (48%) of producers in the May survey said the Crop Insurance Title will be the most important aspect of a new farm bill. Coming in second was the Commodity Title, chosen by one-fourth (25%) of respondents. Almost half of corn and soybean producers expect Congress to raise PLC reference prices for both crops when a new farm bill becomes law.
Click here for the full report.