Weaker expectations for the future led to a decline in farmer sentiment in March as the Purdue University-CME Group Ag Economy Barometer index decreased 12 points to a reading of 140, a decrease from 152 a month earlier. The farmer view of the future was decidedly less optimistic in March than in February, as the Index of Future Expectations dipped to 144, which was 15 points less than in February. A weaker Current Conditions Index, which decreased 5 points in March to 132, also contributed to the weakening in farmer sentiment.
Reductions in key crop prices since mid-February, combined with concerns about the future of agricultural trade and farm policy, were important factors behind the sentiment shift. Even with the decline in expectations for the future, farmers were still more optimistic about the future than the current situation. The Future Expectations Index remained 12 points more than the Current Conditions Index. The March barometer survey took place March 10-14.
Coinciding with the weakness in farmer sentiment, the Farm Capital Investment Index declined 5 points in March to 54. Despite the decrease, March’s investment index was still the second-best reading recorded since June 2021. The Farm Financial Performance Index also decreased in March, decreasing 8 points to 102. At a measurement of a little more than 100, the performance index suggests producers, on average, still expect their farm’s financial performance to slightly exceed the level from a year ago. The financial-performance outlook was likely buttressed by expectations for strong financial performance among livestock operations, which helped offset weaker expectations for many crop farms.
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