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Market Insight: Mixed Outlook


There was a sharp decline in farmer sentiment in May, according to the latest Ag Economy Barometer published on Tuesday. Lowered expectations for profitability is the key concern.

“It’s concern over the risk of a cost-price squeeze, and we’re right in the middle of it,” Jim Mintert told Agri-Talk’s Chip Flory. “They have very strong current ratios”, he continued, “that’s going to help them manage the downside going forward. So that’s the good news.”

Mintert is the principal investigator and director of Purdue University’s Center for Commercial Agriculture, and their “Barometer,” involves an in-depth survey of 400 producers. His take on the current situation is that farmers’ “real concerns” are around their future expectations for profitability. Three factors primarily are contributing to farmers’ feelings that they’re in the midst of a cost-price squeeze, Mintert contends: 

1.    Crop prices have dropped significantly in the past month, and the expectation is for softer prices moving forward. In mid-May, Eastern Corn Belt fall delivery bids for corn fell over $0.50/bushel (10%), and soybean bids declined over $1.00/bushel (8%), compared to bids available in mid-April, when last month’s barometer survey was conducted.

2.    High input costs continue to erode farmer confidence. Costs for fertilizer and fuel have moderated somewhat, compared to this time last year. “But our other input costs have not backed up at all, so we’re stuck with some relatively high input costs,” Mintert said.

3.    Interest rates are going the wrong way.  Mintert said it’s not clear to him how many farmers have already felt the impact of rising interest rates. He anticipates the impact will be felt by farmers as they tabulate their year-end results for 2023 and move into 2024.

““Innovative biologicals can help American farmers fight back and avoid wasting the fertilizer they do choose to buy,” says Mitch Eviston, Meristem Founder and CEO. He says Meristem’s line-up of EXCAVATOR™ and REVLINE HOPPER THROTTLE™ can help farmers reduce their dependence on blanket fertilizer applications and raise more bushels at less cost. “Biologicals and other new technology are the antidote for higher input prices,” he says. “Now is the perfect time to try new technology that can free up nutrients you’ve already paid for and improve plant and soil health in the process.”

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