By Jean-Paul MacDonald
A recent study from Purdue University revealed that farmer sentiment in August wasn’t at its best. The Ag Economy Barometer, a tool used to gauge how farmers are feeling, showed an 8-point dip to 115 points. The concern is that farmers seem to be worried about current conditions on their farms and the broader U.S. agriculture scene.
James Mintert from Purdue University pointed out that the major culprits behind this dip in confidence are rising interest rates and the cost of farming inputs. In fact, a significant number, 60% of the farmers surveyed, think interest rates will go up in the next year.
When asked about their biggest worries for the coming year, many farmers mentioned higher input prices and those pesky rising interest rates. Despite crop prices going down this summer, only 20% saw this as a top concern.
Investments are also being affected. The Farm Capital Investment Index dropped 8 points to 37 this month. What’s causing this? Well, the main reasons are the rising costs of farm machinery, construction, and—you guessed it—those increasing interest rates.
But it’s not all bad news! When it comes to the value of their land, farmers are still holding on to some optimism. A good number (39%) believe their land value will go up in the next year. And for the longer term, a whopping 63% think values will rise over the next five years.
Lastly, there's chatter about carbon contracts in farming, especially among corn and soybean growers. Only a small number have discussed getting paid to capture carbon on their farms, and an even smaller group has signed a contract. The main reason for hesitation is the payment seems too low for many. For more detailed insights, you might want to check out the full Ag Economy Barometer report.