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Farmer Sentiment Improves as Interest Rate Expectations Shift

U.S. farmers’ outlook improved in March as the Purdue University/CME Group Ag Economy Barometer index increased to 114, 3-points higher than in February. While the Index of Current Conditions fell by 2 points to 101, the Index of Future Expectations climbed to 120, up by 5 points compared to February. The disparity between current and future indexes was primarily attributable to farmers’ perceptions that a financial downturn took place over the past year, coupled with expectations for some improvement over the next 12 months. The March survey was conducted from March 11-15, 2024.

Producers’ expectations for interest rate changes have shifted which could help explain why producers look for financial conditions to improve. This month 48% of respondents said they expect a decline in the U.S. prime interest rate over the next year, up from 35% in December. Just one-third (32%) of producers foresee an interest rate increase compared to 43% last month. Only 20% of respondents this month identified the risk of rising interest rates as a primary concern, a decrease from the 24% recorded in December 2023. High input costs continue to be producers’ No. 1 concern, with 36% of respondents expressing worry.

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Grain Markets - Heather Ramsey

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As producers around the state tie a bow on the planting season trade negotiations and tariffs keep looming over the grain markets. Joining us to discuss those and other topics this week, is Heather Ramsey from the ARC Group. Here is our conversation from Wednesday afternoon.