A recent Purdue University and CME Group Ag Economy Barometer report, based on a survey of 400 U.S. agricultural producers, reveals producers expect financial performance in 2022 to be worse than in 2021. The survey was conducted Feb. 14-18, just days before Russia’s invasion of Ukraine.
“These survey responses suggest that concerns about the spike in production costs and supply chain issues continue to mostly outweigh the impact of the commodity price rally that’s been underway this winter,” James Mintert said in a news release. Mintert is the barometer’s principal investigator and also director of Purdue University’s Center for Commercial Agriculture.
Higher input costs are the No. 1 concern of farmers (47%), according to the report. This is followed by lower output prices (16%), environmental policy (13%), farm policy (9%), climate policy (8%) and COVID-19’s impact (7%).
In regards to herbicides becoming an increasing concern for farmers, “we are not able to buy what we want to buy. We are having to scramble... it’s going to take a lot of planning,” Mintert said in a recent AgriTalk segment.
On a positive note, Mintert said when considering 2022 potential income levels, it’s important to factor in just “how good income levels were in 2021... our projections in 2022 still look pretty good.”
As to the future, about 40% of farmers stated they have been putting investment plans on hold because of tight machinery inventories. Additionally, more than half (53%) of those surveyed said they “either had no plans to grow or plan to retire/exit in the next five years.” This number is up 10% since 2016 according to Mintert.
