Farmer Sentiment Down Again
Published: Friday, July 8, 2022
The Purdue University/CME Group Ag Economy Barometer continued to slide in June, down two points to a reading of 97. Producers' expectations for the future also weakened. The Index of Future Expectations fell five points to a reading of 96, marking the lowest level for the index since October 2016.
Meanwhile, producers were slightly more optimistic regarding current conditions; the Index of Current Conditions improved five points to a reading of 99. The Ag Economy Barometer is calculated each month from 400 U.S. agricultural producers' responses to a telephone survey. This month's survey was conducted June 13-17.
"Rising input costs and uncertainty about the future continue to weigh on farmer sentiment," said James Mintert, the barometer's principal investigator and director of Purdue University's Center for Commercial Agriculture. "Many producers remain concerned about the ongoing escalation in production costs as well as commodity price volatility, which could lead to a production cost/income squeeze in 2023."
The Farm Financial Performance Index, which is primarily reflective of income expectations for the current year, improved two points to a reading of 83 in June, yet remains at one of the index's lowest readings over the past two years.
When asked about expectations for their farm's financial condition in June 2023 compared to June 2022, 51 percent of survey respondents said they expect their farms to be worse off financially a year from now. This is the most negative response received to this question since data collection began in 2015.
For the second month in a row, the Farm Capital Investment Index held at a record low of 35, as producers continue to say now is not a good time to make large investments in their farm operation. Supply chain issues continue to frustrate farmers. In May and June, 50 percent of producers said that tight machinery inventories were impacting their farm machinery purchase plans.
The top concerns for producers in the upcoming year continue to be input prices (43 percent), followed by input availability (21 percent), government policies (18 percent), and lower output prices (17 percent). Looking ahead to 2023, a Machine, The Ghostbuster Ectomobile and more.
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