A national measure of the health of the U.S. farm economy, the Purdue University / CME Group Farm Economics Barometer is based on a survey of 400 farm producers. Its objective is to give an idea of the health of the agricultural economy with an index value.
The results of the most recent survey, conducted November 15-19, revealed that producers are concerned about rising costs. The report shows that the current conditions index fell 7 points in November to 128, and the future expectations index fell 4 points to 110.
November marked the lowest reading of 2021 for all three measures of producer sentiment and, year over year, the barometer is 30% lower than November 2020.
“Farmers face a sharp increase in production costs coinciding with fluctuating crop and livestock prices, the prospect of environmental and fiscal policy change, uncertainty over COVID-19, as well as a host of other issues, all of which negatively impact farmer sentiment, ”said James Mintert, senior barometer researcher and director of the Center for Commercial Agriculture at Purdue University.
Farmers have expressed concerns about rising costs of production, especially for fertilizers, farm machinery, seeds and fuel. According to the November survey, 43% of those polled expected input costs to increase by more than 16% in the coming year. This compares to the real average rate of agricultural input price inflation over the past decade of less than 2%.
The agricultural capital investment index fell 7 points to 39, a drop that analysts attributed to supply chain problems. This is the lowest reading since April 2020.
In November, 44% of those polled said their machinery purchase plans were impacted by low inventory.
Almost half of respondents (47%) chose rising input costs as their biggest concern for the coming year.
The agricultural financial performance index rose 2 points to 106 in November. That’s 10% higher than the June 2021 reading. Mintert attributed this to good crop yields and strong wheat prices.
The index also shows that producers are very optimistic about the value of farmland.
Respondents also expressed concern about government policies and regulations. In the November survey, 82% of producers who responded said they expected an increase in restrictive environmental regulations, 74% in exporting higher property taxes and 77% expecting an increase in property taxes. income in the near future.