Barometer: producer sentiment dips because of rising input cost concerns and more
Ag producers are less optimistic about current conditions on their farms and expectations for the future, according to the latest Purdue University/CME Group Ag Economy Barometer.
Purdue University’s Jim Mintert says it’s important to note that “the week we were doing the survey was before USDA’s acreage report came out, so commodity prices had been drifting lower, and of course volatility in commodity prices, I think, probably contributed to it.”
He tells Brownfield concerns about rising production costs contributed to the drop in producer sentiment.
“Over the last 10 years, input costs have risen on average about 1.8 percent per year,” he says. “…Thirty percent of farmers surveyed said they expect those input prices to rise 8 percent or more in the upcoming year and so that tells you producers are concerned about what’s going on.”
Mintert says nearly 50 percent of corn-soybean producers surveyed expect cash rental rates to rise in 2022. Nearly half of those expecting higher rates said they expect rates to rise from 5 to less than 10 percent, with nearly one-third expecting rates to rise by 10 percent or more.
The overall Ag Economy Barometer fell 21 points to 137 in June. The Index of Current Conditions declined 29 points to 149 and the Index of Future Expectations declined 17 points to 132.
The monthly national survey of 400 U.S. ag producers was conducted June 21-25.
Audio: Jim Mintert