Bank collapses and a continued rise in interest rates weakened farmer sentiment in March as producers reported increased concerns about their current and future expectations.
The overall economic reading in the latest Ag Economy Barometer, produced monthly by Purdue University and the CME Group, fell eight points last month to 117; the reading is the second consecutive month of decline.
Rising interest rates remained a growing concern for producers in the upcoming year, with 25% of those surveyed including it as one of their top concerns.
This month’s short-term farmland index value, which asks respondents about their farmland value expectations for the upcoming 12 months, provided the weakest reading since September 2020. It declined 32 points from one year earlier.
While there was not a question about the Silicon Valley Bank or Signature Bank collapse in the survey, the responses were collected March 13-17 as their problems came to light. Multiple producers “voiced concerns about the banking sector’s problems and its potential to hurt the economy" during the open-ended question period at the end of the survey, according to the report analysis.
Commodity price declines for corn, soybeans and wheat during late February and early March also contributed to the lower overall reading.
Higher input costs remained the number-one concern for 34% of producers in the survey. However, apprehension about input costs has fallen since the peak last summer, when it was chosen by 53% of those surveyed.
Farmers also cited confidence in renewable diesel, with 46% of producers expecting industry growth in the next five years. Only one-quarter of farmers expect ethanol industry growth over the same period.
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The vast majority of producers – 88% – expect a boost in U.S. soybean prices due to soybean oil-based renewable diesel production, with 21% of respondents expecting the increase to be greater than $1 per bushel.
Purdue University and the CME Group publish the Ag Economy Barometer on the first Tuesday of each month. Data is collected from 400 agricultural producers through telephone surveys.
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