The latest Ag Economy Barometer reading moved a mere one point from its previous figure, but year-over-year comparisons offer a clearer picture of what farmers are thinking entering 2024.
The December measure of farmer sentiment by Purdue University and the CME Group fell slightly from November, as did indexes measuring future and current expectations. While the monthly drop was less than 1%, the drop from December 2022 was a much larger 10%. The scores for farmers' current expectations dropped 17%, while future expectations were 6% lower.
Worries about inflation are subsiding in farm country, with the majority of those surveyed — 70% — expecting it to be less than 4% in 2024. At this time last year, 50% of producers surveyed expected inflation to top 6%. Producers are also more optimistic about interest rates; about one-third expect rates to drop in 2024 and 22% are expecting no change.
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“The shift in farmers’ perception of financial performance during the fall quarter corresponds with USDA’s more optimistic 2023 farm income outlook released in late November, which was $10 billion higher than their previous forecast,” Purdue’s Jim Mintert said in a release.
Input costs remain the top concern for producers, but at lower levels than what was recorded in 2023. Lower crop and livestock prices are taking up some of that worry; 16% of producers pointed to dropping prices as their top concern in January 2023, a number that increased to 26% in December.
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