Farmer Sentiments Show Slight Improvement, Inflation Weighs on Future Outlooks for Fall

The Ag Economy Barometer for August shows a rise of 4 points, which brings the barometer to a reading of 138 in August, versus the 134 posted in July. Economists say that up-tick was driven by current conditions, which rose 9 points. 
The Ag Economy Barometer for August shows a rise of 4 points, which brings the barometer to a reading of 138 in August, versus the 134 posted in July. Economists say that up-tick was driven by current conditions, which rose 9 points. 
(Purdue/CME Group Ag Economy Barometer)

Farmers are slightly more optimistic about current economic conditions in agriculture, but concerns about inflation are growing according to the latest Ag Economy Barometer from Purdue University and the CME Group.

barometer

The Ag Economy Barometer released Tuesday shows sentiments rose 4 points in August, which brings the barometer to a reading of 138 versus the 134 posted in July. Economists say that up-tick was driven by current conditions, which rose 9 points. 

However, of the 400 agricultural producers surveyed each month, overall farmer sentiments are still well below April's reading of 178.  

futur

The Barometer revealed the biggest concern right now is rising input costs heading into the next growing season. 

"Farmers are becoming increasingly concerned about the impact of inflation on farm input prices," says Jim Mintert, agricultural economist with Purdue Center for Commercial Agriculture who also co-authors the survey. "And in this month survey, 39% of the producers in our survey said they expect to see farm input prices rise by 8% or more over the next 12 months. And 21% of them said they actually expect to see firm input prices rise by 12% or more."

Inflation Fueling Farmland Values

Inflation is also a factor fueling rising farmland values. Both short-term and long-term farmland values expectations rose 4 points, a level that's near the all-time highs since the barometer began in 2015.

farmland

It's not just farmland values soaring. Farmers also expect to pay more for cash rent next year.

Mintert says one-half of corn and soybean growers expect rental rates to rise in 2022, with 44% expecting the increase to be 5% to 10%. One-third expect rates to rise by more than 10%. 

cash rent

Supply Chain Concerns

The Barometer also shows farmers' plans for purchasing equipment this year remains unchanged compared to July. Purdue economists say supply chain challenges are hampering farmers' purchase plans for new equipment this year.

The "Farm Capital Investment Index" showed modest improvements in August, rising to a reading of 53, up 3 points compared to July. Mintert says the small improvement in the index could be traced to fewer producers in August saying they planned to reduce their farm construction activity compared to a year ago. At the same time, farmers said their machinery purchase plans were unchanged compared to those reported in July. 

 

Latest News

Cool Creations previews new products at AWG show
Cool Creations previews new products at AWG show

North Kansas City, Mo.-based Cool Creations LLC had two new products to show off at the Associated Wholesale Grocers' seventh annual Innovation Showcase, March 25-26.

Dole, Fresh Express nix sale of fresh vegetables division
Dole, Fresh Express nix sale of fresh vegetables division

Following Department of Justice concerns about competition in the packaged salad market, the companies have abandoned the proposed $308 million deal.

Fresh Del Monte named to most trusted companies list
Fresh Del Monte named to most trusted companies list

Fresh Del Monte is among the honorees on the Most Trustworthy Companies in America 2024 list, recognized for a commitment to quality, sustainability and innovation in fresh produce.

Improved conditions for West Mexico produce may arrive with spring
Improved conditions for West Mexico produce may arrive with spring

West Mexico growers faced a tough fall/winter season, but distributors believe things are looking up for spring with increased supplies and more reasonable prices.

What’s next for retail foodservice: Retailers dish up insights in free webinar
What’s next for retail foodservice: Retailers dish up insights in free webinar

"Impact Retail Foodservice 2024" will gather industry experts to discuss opportunities and challenges, as well as share insights for driving growth in the year ahead in one of the hottest departments in grocery.

Natural Delights names new CEO
Natural Delights names new CEO

With CEO Tim Rooney is stepping down to pursue another opportunity, Natural Delights is promoting its chief operating officer, effective April 1.