US farmer sentiment nosedives over low commodity prices
The index fell 13 points to 100; Current Conditions fell 17 points to 83 and the Futures Expectations index also fell 11 points to 108.
The double-digit decline takes farmer sentiment to a level not seen since fall 2015 to winter 2016, when farm incomes were declining sharply, according to James Mintert and Michael Langemeier of Purdue Center for Commercial Agriculture.
The nosedived largely due to concerns about weakening commodity prices, with 30% of respondents in August identifying lower crop prices as their top concern; in comparison, just 20% chose this option a year ago.
US market analysts expect a strong harvest, which is likely to weaken market prices for US corn, wheat and soybean. Throughout 2024, favorable growing conditions created expectations for strong yield, causing Futures prices to fall. Other uncertainties, such as the passing of a new Farm Bill, also weigh on US producers.
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Meanwhile, the August Farm Financial Performance Index was the lowest since July 2020, falling 14 points lower than a year ago.
Confidence in the investment climate in production agriculture was also poor as the Farm Capital Investment Index slid 7 points to a reading of 31 month on month and was 6 points lower than a year ago, matching its all-time lowest reading.
The Short-Term Farmland Value Expectations Index fell 13 points month on month and 21 points on a yearly basis as more farmers (from 13% to 24%) said they think farmland values would decline in the next year.
