Farmer sentiment rose in August, by 15-points to 117, according to Purdue University and CME Group’s latest Ag Economy Barometer findings.
The results, posted on Tuesday, show the rise in sentiments is attributed to index of current conditions and index of future expectations.
Jim Mintert, Ag Economist at Purdue University, says these numbers came as a surprise.
“This is a reflection of income projections that show 2022 is going to be a pretty good year for most people—not as a good as 2021, but still good,” says Mintert.
The 2022 crop, which will largely be sold in 2023, may be leading sentiments, along with fuel price declines from July to August, according to Mintert.
Farmer’s Primary Concerns in August
However, some concerns remain in rural America:
1. Input costs
2. Farmland cash rental rates
Mintert says more than half of respondents cited input costs as a primary concern, not only in the “total dollars” it will take to get a crop in the ground, but also input availability.
While cash rental rates have recently been on a trend of 2-3% increases each year, Mintert and his colleagues feel 2023 will bring a price hike “in the ballpark” of 5%. According to the latest sentiments survey, farmers are also taking note of land prices.
“57% of the corn and soybean farmers in this month’s survey said that they expect to see cash rental rates in 2023 compared to 2022,” he says. “Two-thirds of those respondents said they expect to see the rise and run rates to be less than 10% per acre.”
Overall, researchers say farmers were less worried in August about their farms financial situation than they were in July.
“Carbon Curious”
This month’s survey also revealed an uptick in the percentage of farmers engaged in discussions with companies who offer payments to sequester carbon.
Past surveys, starting in 2021, inquired about farmer’s interest in carbon sequestration. Mintert says the number of respondents who claimed to engage in carbon discussions in 2021 and 2022 were between 2 and 5%. However, August 2022 showed a major shift in curiosity.
“This month, that [carbon curiosity] jumped to 9%,” says Mintert. “I do think we’re seeing an increase in the curiosity level, but not very many people signing.”
While the conversations have picked up, only 1% of those asked in August’s survey said they’ve signed a carbon contract.
More on the Ag Barometer:
Here’s Why Buying U.S. Farmland Just Became More Expensive
As Anxiety Levels Increase, Farmers Eye Acreage Shifts
