By Michele F. Mihaljevich

Indiana Correspondent

WEST LAFAYETTE, Ind. – Farmer sentiment – including indexes of current conditions and future expectations – improved in July, according to the latest Purdue University/CME Group Ag Economy Barometer.

The barometer rose eight points in July to 113. The Index of Current Conditions increased 10 points to 100. The Index of Future Expectations was up seven points to 119.

Jim Mintert, director of Purdue’s Center for Commercial Agriculture, said he was surprised the ag barometer was up in July.

“I certainly wasn’t expecting a rise in the barometer this month,” Mintert noted. “That still leaves the index, though, down 10 points compared to a year ago, so it’s not as positive as you might think at first glance.”

During Purdue’s Commercial AgCast, Mintert wondered if the timing of the July survey contributed to the increase in the barometer. The survey of 400 U.S. producers was conducted July 15-19, which coincided with the Republican National Convention in Milwaukee, Wis.

In 2016, following the presidential election in which Donald Trump was elected, there was a big jump in farmer sentiment, Mintert said. In 2020, he added, when Trump lost, things moved in the opposite direction.

Past ag barometers have asked policy related questions to learn more about why people’s sentiment might have changed other than economics, he said. “Some of those things that people focused on in the past were the change in the regulatory environment, change in taxation, even change in trade policy.

“We didn’t ask those questions this month, so we can’t delve into that, but when we looked at the results, I think (we) thought that the political environment might have had an influence on sentiment. We’ve got evidence in the past that things other than economic variables can influence sentiment, and I think this might be a case of where that actually happened.”

The ag economy 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 results were released Aug. 6.

The shift in sentiment in the July barometer was primarily due to fewer respondents saying conditions were worse than a year earlier, and fewer saying they expected bad times in the future, according to the report.

There were no major changes regarding what respondents said were their biggest concerns for the upcoming year, Mintert said.

“The number one issue continues to be high input cost. Number two, though, is lower crop and livestock prices, or the risk of lower crop and livestock prices.”

Respondents were asked what they thought might happen to cash rents for 2025. Seventy two percent said they expect to see no change in rents, while 15 percent expect them to rise, and 13 percent expect them to fall.

Before the ag barometer was released, Michael Langemeier, associate director of the center, discussed cash rent with Farm World. He called cash rent the elephant in the room when talking about overall production costs.

“Cash rent is persistent in that it takes some pretty low returns and several years of low returns for cash rent to come down. If 2024 and 2025 are not very good, we’re going to see some downward pressure on cash rent. We haven’t really seen that since 2013. We’re setting ourselves up right now, if ‘24 and ‘25 are relatively poor, that we might see some correction.”