Purdue reports bleak outlook among farmers
WEST LAFAYETTE, Ind. (WISH) — America’s farmers have a grim outlook at the moment, according to Purdue University’s Ag Economy Barometer. The monthly report for August found sentiment among the country’s food producers to be at one of the lowest levels in the last decade.
“2023 was not a bad year by historical standards,” said James Mintert, director of the Purdue Center for Commercial Agriculture, on the AgCast podcast. “People are clearly expecting a much worse year in ’24, and I think we’re picking up evidence that they’re worried about what ’25 will look like.”
The Ag Economy Barometer is a gauge of the health of the country’s agricultural economy, using interviews with hundreds of farmers. Sentiment is expressed through a numerical index.
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Over the last decade, the August index has ranged from 115 to 144. This year, it dropped sharply to an even 100. That’s the lowest it has been for the month in the last ten years.
“I think the comparison for us is really thinking about 2015-2016 and whether or not this is a harbinger of what’s ahead with respect to a multiyear downturn.” Mintert said on the AgCast podcast.
Purdue and CME Group develop the main index through questions about individual elements of the agricultural economy. The numbers show clear weaknesses in several of those areas. Sentiment about the industry now (Index of Current Conditions) and going forward (Index of Futures Expectations) both slipped significantly from June.
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An all-too-familiar paradox is driving some of the dour responses: farmers are bracing for too much of a good thing. Harvest yields look to be high across the board, meaning prices will likely drop, hurting income.
Questions about the bottom line also reflect sliding sentiment. Purdue reports the Farm Financial Performance Index us the lowest it has been since the early months of the COVID-19 pandemic.
Farmers are also pouring less money into their operations, with the Farm Capital Investment Index matching the index’s all-time lowest reading.