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US farmers with new problems

Фермерите в САЩ с нови проблеми

With commodity prices and farm incomes expected to decline in 2024, U.S. farmers expressed a more pessimistic outlook in a January survey by Purdue University and the CME Group.

The Economic Barometer for January fell to 106, down 8 points from December. Producers expressed a more pessimistic view about the current state of their farms and future prospects. The index of current conditions fell 9 points and the index of future expectations fell 7, both from December.

Expectations of weaker farm incomes in 2024 contributed to the overall decline reflected in the Farm Financial Performance Index to 85, down 12 points from the previous month. The survey was conducted in the period January 15-19.

"The number of producers pointing to higher commodity prices and lower farm incomes in 2024 significantly contributed to the decline in all indices," said James Mintert, principal investigator and director of the university's Center for Commercial Agriculture Purdue.

There was an increase in the proportion of manufacturers expecting a decline in financial results for the coming year, with the figure rising from 20% in December to 31% in January. The percentage of those who expect income levels to remain stable decreased from 63% to 53%.

The Farm Capital Investment Index fell to 35, down 8 points from December. There was a change this month as fewer manufacturers announced their intentions to make major investments due to rising interest rates, reversing the trend seen through most of 2023.

This year, a greater number of manufacturers expect the size of their operating loan to remain stable compared to last year, with fewer intending to borrow more.

Of those who plan to ask for more money - 71% will cover the rising cost of raw materials, while only 23% will invest in expanding the farm.

Notably, the share of producers who expect a decline in farmland values ​​over the next year has risen to 16%, up from 10% three months ago.

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