Few farmers—only 13 percent—surveyed for the Ag Economy Barometer said they expect farm profitability to improve in the year ahead. “There remains an undercurrent of concern about the farm economy among producers,” said the Purdue economists who oversee the monthly gauge of farmer confidence on Tuesday.
Overwhelmingly, crop and livestock producers said they expect higher interest rates in 2019. Some 22 percent said they expect farmland prices to fall in 2019, a 5-point increase from the previous survey. Agriculture is a capital-intensive business so changes in interest rates can affect profitability as well as the value of assets such as farmland. For the sector, land is 80 percent of farm assets.
Although they are still a minority, more farmers said they will reduce their plantings of soybeans in 2019. Soybean prices have fallen as a result of the trade war. Thirty percent of farmers said they will plant less land to soybeans next year, compared to 19 percent in the previous survey. A lopsided 69 percent said they would cut acreage by more than 10 percent, a quarter said they would pare back planting by 5 to 10 percent, and 5 percent planned a cutback of no more than 5 percent. The soybean land predominantly would go into corn.