WEST LAFAYETTE, Ind. – A measure of farmer sentiment dropped to its lowest level in nearly two years in April, according to the most recent Purdue University/CME Group Ag Economy Barometer.

Producer worries over current and future financial performance were the driving forces behind the decline, said Jim Mintert, director of the Purdue Center for Commercial Agriculture.

“If you think about it, in terms of why sentiment dropped, people became less optimistic about what was taking place on their farms today and they’re also starting to show some evidence of being concerned about where we’re headed here over the course of the next year,” he explained.

The ag economy barometer index dropped 15 points from 114 in March to 99, the lowest reading since June 2022. The index is 24 points below where it was a year ago, Mintert said during Purdue’s Commercial AgCast.

The ag barometer gauges the health of the U.S. agricultural economy. A value greater than 100 shows positive sentiment toward the economy. Values lower than 100 indicate negative sentiment. The survey of 400 U.S. producers was conducted April 8-12. The results were released May 7.

Numbers in several other categories included in the barometer also dropped in April.

“The index of current conditions and the index of future expectations both fell pretty hard as well this month,” he said. “Current conditions fell 18 points (to 83) compared to last month, and down 46 points compared to April of 2023. The future expectations index was down 14 points (to 106), both compared to last month and compared to a year ago.”

The farm financial performance index declined from 83 in March to 76 in April. Last fall, the index was 97. Mintert said the index has been drifting lower since the end of last year. The index is now 17 points lower than it was a year ago.

“Producers are increasingly showing concerns about their financial situation as they look at what’s taking place here in 2024,” he noted. A lot of the concern “obviously is related to the weakness we’ve seen in crop prices,” Mintert added.

The farm capital investment index fell 10 points from 41 in March to 31 in April. The index is down 12 points from a year ago. The index reading of 31 is one of the weakest capital investment indexes Mintert said he had seen.

The low index ties back to farm financial performance weakness and the expectations that 2024 will be a tough year for a lot of farmers, especially crop producers, he said.

After increasing in March, short-term farmland value expectations dipped in April. The index was 112 in April, down 12 points from March.

“If you think about what was taking place there, last month might have been just a little bit of an anomaly with respect to what that index has been doing,” Mintert said. “That index, except for last month, has been drifting lower since late last year. This month may just be kind of a little bit of resumption of that. Clearly producers are less optimistic about where farmland values are headed over the next 12 months than they were.”

At this time last year, the index was 123. It was 144 two years ago and 159 three years ago.

In April, 17 percent of those surveyed said they expected farmland values to weaken or decline over the next 12 months. Twenty-nine percent said they expected to see values rise.

A year ago, 14 percent said they thought values would weaken, and 37 percent said they expected them to go up.

Mintert said the numbers show an erosion of confidence with respect to farmland values.