A monthly measurement of the state of mind in farm country dropped for the second month in a row in October as farmers signaled concerns about the possibility of sharp increases in the prices of key inputs.
The Ag Economy Barometer maintained by Purdue University and the CME Group observed a modest decline in October after a slightly sharper drop in September. According to a video accompanying the results, the drop “occurred as a result of producers’ weaker perceptions regarding both current and future conditions in the production agriculture sector.”
The indexes of current and future expectations both dropped in October, as did the barometer’s farm financial performance index.
“Rapid run-ups in input prices, especially fertilizer for crop production, are giving rise to concerns about producers’ operating margins weakening,” the report noted. “Livestock producers are also concerned about a cost-price squeeze, especially in the pork and dairy sectors.”
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The survey also explored producers' awareness of, and plans to, take part in markets that would pay for carbon sequestration efforts. Some 71% of respondents said they were not aware of opportunities to receive carbon capture payments on their farm, a sharp increase from the 54% reported in April. The survey’s report suggests “despite a rise in interest and publicity, awareness of carbon capture opportunities by producers on their farms has not increased.” Of those that were aware of the opportunities, just over 2% said they had discussed payments with companies.
The survey is based on responses from 400 producers from Oct. 18-22.
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