(The Center Square) – Farmers’ confidence in the economy is on the downswing again, according to the latest monthly report from Purdue University.
The school’s Ag Economy Barometer, which is produced by the Purdue Center for Commercial Agriculture and the CME Group, fell three points from May to 105 in June. The score is based on surveys conducted from June 17-21.
Concerns about future economic conditions pushed the decline. That index dropped 5 points to 112. A third of those polled fear higher costs are ahead, while a quarter expect crop and livestock prices to fall. In addition, 23% anticipate higher interest rates in the coming.
Worries about higher interest rates have been growing steadily throughout the year. Just 18% of those polled in February cited that as their biggest issue.
Agricultural economists see a pattern developing in 2024 that is similar to what happened a year ago.
“Last year, producers’ farm financial expectations
improved from spring into summer and then again from summer into fall,” the report stated. “The index’s improvement in 2023 was driven by improving revenue expectations arising from good crop yields and a fall price rally. It remains to be seen if those conditions will be repeated in 2024.”
Of those who believe the value of their land will increase within the next five years, 57% anticipate demand from non-agricultural investors to spark the higher values, with 16% citing inflation.
Purdue economists have also been tracking energy production as a value indicator for three months, and 1-in-10 farmers point to that as their reason for anticipating higher land values.
Solar developers remain interested in acquiring farmland, as 16% told Purdue they’ve been in contact with representatives from the industry in the last six months. That’s down from 20% in May.
Among those who have been approached, 69% said they’ve received offers of $1,000 or more per acre, compared to 55% in May. And 27% said the proposals they were given surpassed $1,500 an acre.
More solar investors are also providing escalator clauses to farmers, with 58% saying the condition has been included in their offers. The typical proposal runs at about 3% a year.