Agri-Pulse Farm Opinion Poll: Farmers Ready to Act on Upturn in Soybean Prices
By Sara Wyant
© Copyright Agri-Pulse Communications, Inc.
But respondents still skeptical about short-term strength of farm economy
WASHINGTON, May 19, 2016 - Soybean farmers have grain to sell and a $2-per-bushel improvement in market prices during the past two months will pry inventory loose according to feedback provided by Iowa producers.
Forty-five percent of 126 farmers surveyed this month by Agri-Pulse said they still have a portion of last year's soybean crop to sell. When asked what percent of their 2016 crop has been presold, 48 percent said 10 percent or less while another 43 percent said between 10 and 50 percent. Just 8 percent admitted to preselling more than 50 percent of the crop currently being planted.
Agri-Pulse Editor Sara Wyant, who helped collect and tabulate the results of the quarterly poll conducted May 7-15 with the Iowa Soybean Association (www.iasoybeans.com), said farmers are also motivated to sell with the improvement in prices.
“Thirty-seven percent of respondents said a price of $10.25 would compel them to sell their 2015 crop while another 12 percent said $10.75,” Wyant said. “Ten percent said a price of $11-11.25 would get them to act. About 40 percent of the farmers surveyed preferred not to disclose a price.”
Having inventory to sell at a significantly higher price than just two months ago, however, is not enough to remove skepticism about the overall strength of the farm economy moving forward.
For the third consecutive year, farmers responding said they expect weaker financial conditions and are “tightening their belts” to trim expenses.
All respondents planned to reduce farm expenses in 2016 and reductions are planned in several areas. The majority (63 percent) plan to reduce purchases of farm equipment but another 36 percent say they will cut back on fertilizer expenses and 28 percent trimmed seed costs, primarily by switching to less expensive varieties.
“While most farmers are eternal optimists, a combination of factors involving lower commodity prices, high cash rents and an increasing regulatory burden are still testing our outlook for the remainder of this year and next,” said Iowa Soybean Association President Wayne Fredericks. “Even with a slight uptick in market prices, high input prices remain, squeezing most budgets and making it difficult to avoid red ink.”
Almost two-thirds expect farmland values to continue to decline, but cash rental rates on those acres have not dropped significantly. Nearly 40 percent said their landlords were moderately receptive to reductions in rent, but another 19 percent said they were unable to reduce cash rental rates and 15 percent were unwilling to even try. Almost 67 percent of the farmers who participated in this poll pay cash for rented farmland.
Still, almost 60 percent hung on to those rented acres, perhaps in anticipation of future declines. Fifty-five percent of those surveyed expect cash rental rates to drop more in the future while almost 40 percent expect rates to stay about the same.
When asked which national agricultural issue was of most concern this year, 32 percent of the farmers said “reducing regulatory burdens, like the Waters of the U.S. rule” and another 21 percent said they were concerned about maintaining the Renewable Fuel Standard. Another 11 percent said they were concerned about keeping the 2014 farm bill safety net programs intact.
Farmers are also keeping an eye on presidential politics. Asked who they would support of the five candidates who have most recently been in the race, over one-third said they would support Donald Trump, while twenty-two percent were interested in supporting Ohio Governor John Kasich and fourteen percent would have liked to support Texas Senator Ted Cruz. Kasich and Cruz have dropped out of the race. On the Democratic side, eleven percent support Secretary of State Hillary Clinton while only two percent support Vermont Senator Bernie Sanders.
About the Agri-Pulse Farm Opinion Poll: The ISA and Agri-Pulse launched the Agri-Pulse Farm Opinion Poll to help farmers amplify their voice by collecting opinions and circulating the results. The survey is conducted at least four times annually and captures perspective and opinions on such topics as key legislative and regulatory issues, crop conditions, planting and harvesting progress, yield estimates and other timely issues impacting farmer profitability.
About Agri-Pulse: Agri-Pulse is the most trusted farm and rural policy source in Washington, D.C., providing a balanced perspective on a wide variety of issues including the farm bill, nutrition, trade, food safety, environment, biotechnology, organic, conservation and crop insurance. In addition, the editorial team has been tracking presidential candidates on farm and rural issues as part of a special section: Rural Route to the White House. For more news, go to www.agri-pulse.com.
About Iowa Soybean Association: The ISA (www.iasoybeans.com) develops policies and programs that help farmers expand profit opportunities while promoting environmentally sensitive production using the soybean checkoff and other resources. The association is made up of nearly 11,000 farmer members and is governed by an elected volunteer board of 21 farmers.
Not funded by the soybean checkoff