A measure of the state of mind in farm country is at its lowest point since July 2020 as producers report less optimism about their current and future circumstances and signal concerns about the impact of inflation on their operations.
The September Ag Economy Barometer maintained by Purdue University and the CME Group dropped 14 points (a little more than 10%) in September on the heels of corresponding drops in the Barometer’s Index of Future Expectations and Index of Current Conditions.
A release accompanying the results, however, points out the Farm Financial Performance Index was unchanged from the previous month’s report, and more detailed answers offered in September showed “fewer farms said they expected their farm's financial performance to match last year's, while the percentages of producers expecting both worse and better financial performance rose.”
James Mintert, the barometer's principal investigator and director of Purdue University's Center for Commercial Agriculture, said the divergence in expectations “could reflect differences in how individual farms managed risk in a period of rapidly fluctuating commodity prices.”
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The September report — based on the survey of 400 producers between Sept. 27-29 — also demonstrated expectations for a big boost to input prices in September. Some 34% of producers surveyed expect input costs to jump more than 12% in the next year; in August, 21% of respondents expected that big of a hike. The survey also framed the question to point out average prices have increased by about 1.8% annually over the last decade.
Producers also offered a more pessimistic view of the future of ag exports; just 37% of respondents expect ag exports to increase over the next five years. That’s a drop of five percentage points from August and a decrease from the 58% reported in September 2020.
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