Farmers are increasingly worried about their current and future financial health, according to the monthly Ag Economy Barometer sponsored by Purdue University and the CME Group.
The overall index for June was down 2 points to a reading of 97, while the Index of Future Expectations fell 5 points to 96, "marking the lowest level for the index since October 2016," Purdue said in a news release. "Producers were slightly more optimistic regarding current conditions; the Index of Current Conditions improved 5 points to a reading of 99."
"The Farm Financial Performance Index, which is primarily reflective of income expectations for the current year, improved 2 points to a reading of 83 in June, yet remains at one of the index’s lowest readings over the past two years," Purdue said. "When asked about expectations for their farm’s financial condition in June 2023 compared to June 2022, 51% of survey respondents said they expect their farms to be worse off financially a year from now. This is the most negative response received to this question since data collection began in 2015."
Producers' top concerns over the next year continue to be input prices (43%), followed by input availability (21%), government policies (18%), and lower output prices (17%). "Looking ahead to 2023, a majority of farmers expect to see another round of large input cost increases, with 63% of producers expecting higher costs in 2023, on top of the large increases experienced in 2022," Purdue said.
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Farmers are looking to diversify their operations. Asked about cropping plans for the upcoming year, one of five (19%) said they plan to change their crop mix in the upcoming year in response to rising input costs.
"Among those who plan to shift their crop mix, almost half of the respondents (46%) said the biggest change will be to devote a higher percentage of their acreage to soybeans," according to a joint statement by James Mintert and Michael Langemeier of the Purdue Center for Commercial Agriculture. "Twenty-six percent of those planning a crop mix change said the biggest change would be to devote more of their farm to wheat production, while 21% of respondents said they would shift to planting more corn."
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