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By James Mintert and Michael Langemeier, Purdue Center for Commercial Agriculture
The February Purdue University/CME Group Ag Economy Barometer reading reached 111, marking a 5-point rise from last month. The small uptick is attributed to producers expressing increased optimism about the future, with the Future Expectations Index climbing 7 points to 115. However, the Current Conditions Index remained unchanged. Despite their improved outlook for the future, farmers’ financial performance expectations did not keep pace. February’s Farm Financial Performance Index registered at 85, a slight dip from January and notably lower than its recent peak in December. The February survey was conducted from Feb. 12-16.
Weak crop prices continue to weigh heavily on financial expectations, with mid-February Eastern Corn Belt cash prices for corn and soybeans declining by 7% and 8%, respectively, compared to two months earlier. When producers were asked about their primary concerns for farm operations in the upcoming year, the top concern cited by 34% of respondents was “high input costs,” closely followed by “lower crop/livestock prices,” chosen by 28% of respondents. Worries about rising interest rates among producers seem to have diminished somewhat, with 18% of February respondents citing it as a top concern, down from 26% who did so in November.
