By Steve Bittenbender | The Center Square contributor
(The Center Square) – A growing number of farmers polled by Purdue University are raising concerns about the present and future economic states of agriculture.
According to results released by the Purdue Center for Commercial Agriculture, the Purdue University-CME Group Ag Economy Barometer for March came in at 117. That reading was eight points lower than February’s.
The drop was uniform for both current conditions and future expectations.
The scores are created through a telephone survey of 400 national agriculture producers, with March’s coinciding with Silicon Valley Bank and Signature Bank failures. In addition, the survey was also conducted after farmers witnessed prices for key crops like wheat, corn and soybeans declining just weeks earlier.
“Although the March survey did not include any questions directly related to the bank closures, during an open-ended comment question posed at the end of each survey, multiple respondents voiced concerns about the banking sector’s problems and its potential to hurt the economy,” said James Mintert, the principal investigator for the report and the Purdue center’s director. “These problems also likely weighed on producer sentiment.”
Higher interest rates are now a bigger concern for farmers than the steeper prices for new equipment. Of those who are bearish on investing in their farms right now, 34% cited higher interest rates, and 32% pointed to costs. In February, costs were the bigger concern by a 45-27 margin.
Land value is also a growing concern, at least for the immediate period, as that index fell from 119 to 113. The center noted that was the index’s lowest reading since September 2020 and 32 points lower than a year ago.
Farmers were also asked about the future of ethanol and renewable diesel. Only a quarter of those polled believes ethanol will grow in the next five years, while a 46% plurality believes renewable diesel will.
When farmers who believe the markets will remain the same are factored in, 91% of those surveyed believe the renewable diesel market will remain consistent or grow. That’s compared to 80% for ethanol.
Not surprisingly, most farmers expect the price of soybeans to go up over the next five years. Two-thirds believe the price-per-bushel will rise by at least 50 cents during that span, while 21% expect the prices will rise by at least $1.