Producer sentiment fell to its weakest reading since July 2022, as the Purdue University-CME Group Ag Economy Barometer Index declined 19 points to a reading of 104 in May.
This month’s weak sentiment reading was fueled by declines in both of the barometer’s subindices. The Index of Future Expectations declined 22 points to 98, while the Index of Current Conditions fell 13 points below a month earlier to 116.
Crop price weakness helped trigger the sentiment decline. Eastern Corn Belt fall delivery bids for corn fell over $0.50/bushel (10%) and soybean bids declined over $1/bushel (8%) while new crop June/July delivery wheat bids declined nearly $0.50/bushel (8%) in mid-May, all compared to bids available in mid-April when the April survey was conducted.
In addition to weaker crop prices, ongoing concerns about rising interest rates, high input prices and even the possibility that recent U.S. bank failures could lead to changes in farm loan terms in the upcoming year all contributed to weak producer sentiment.
Producers’ perspective on farmland values in the year ahead weakened as the Short-Term Farmland Value Expectations Index fell 13 points to its lowest reading in three years.
Nearly half of producers feel that the most important aspect of new Farm Bill legislation will be the Crop Insurance Title, while a fourth of producers say the Commodity Title will be the most important part of a new Farm Bill.
Almost half of corn and soybean producers expect Congress to raise PLC reference prices for both crops when a new Farm Bill becomes law.
