Agricultural producers are struggling with increasing concerns about future success as input costs continue to rise. Some farmers are expressing fears of input costs rising as much as 40% over 2021 and 20% or more heading into 2023.
In May, the Purdue University-CME Group Ag Economy Barometer fell below 100 for the first time since April 2020. Last month’s barometer read at 121; however, producer’s sentiments dropped the current conditions index by 26 points while future expectation points fell 21 points.
Ag producers are bearing down as nearly six out of every ten express concerns about 30% or more increases in the cost of inputs.
An overwhelming number (44%) of farmers indicated that high input prices are their primary concern. 57% of producers expect farm input costs to rise 30% compared to last year.
Farmers are responding by making less large capital purchases, with 50% of producers indicating that their purchase plans are impacted by low machinery inventory.
In contrast, farm value indexes rose from 141 to 149, with many farmers believing these values will continue to grow over the next five years. Inflation and investments from non-farm entities contribute to the increase in farm value.
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 between May 16-20, 2022