Farmer sentiment improves in May
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The agricultural outlook among U.S. farmers in May improved over a nearly two-year-low the prior month, but expectations of a challenging year remain.
The Purdue University/CME Group Ag Economy Barometer index last month rose to 108, a 9-point increase from April, which was the lowest level since June 2022. A rise in crop prices helped boost farmer sentiment, a Purdue University news release said.
Meanwhile, the Index of Future Expectations rose 11 points while the Current Conditions Index rose only 6 points, a gap that suggests farmers don’t expect to see much improvement in their margins until next year, Purdue agricultural professor Michael Langemeier said.
“We’ve been talking about the fact that margins look pretty tight for ’24,” he said. “But if we saw some improvement in prices, like we’ve seen recently, and we get some reductions in production costs … certainly margins would look better in ’25 compared to ’24.”
The Farm Financial Performance Index rose to 82 in May, a 6-point increase from April but still 15 points lower than at the end of last year. The index asks producers to compare their farm’s expected financial performance to last year.
The overall outlook on farmland values showed little change in May, but one area showed improvement. Among survey respondents who had a positive outlook on farm values, 12% cited energy production as a reason, up from 8% in April.
Leasing farmland for solar energy production continues to attract participants. About 20% of survey respondents in both April and May said they had discussed the possibility within the past six months, up from 12% in March, the news release said. Nearly a third of survey respondents in April and May who said they had explored leasing options have now signed solar energy leases.
The evolving landscape of energy production is drawing interest in other ways, too, the news release said. Seven percent of survey respondents said they had been approached about developing carbon capture and storage projects by ethanol plants.