Continued uncertainty is impacting farmer sentiment
Uncertainty in the agriculture industry is impacting farmer sentiment, according to the latest Purdue University/CME Group Ag Economy Barometer.
Jim Mintert is the director for the Purdue Center for Commercial Agriculture.
“It’s uncertainty about input prices, it’s uncertainty about where output prices are going to be, it’s uncertainty about a cost-price squeeze,” he says. “People are very nervous about the fact that they’re going to have this very large dollar investment in crops that they put in the ground in 2023. They’re already nervous about the investment they had to make in 2022, but the expectation of most producers is they’re going to see higher input costs for 2023.”
The overall Ag Economy Barometer fell 10 points to a reading of 102. The Index of Current Conditions declined eight points to 101 and the Future of Expectations Index fell to a reading of 102, down 11 points from the month earlier.
He tells Brownfield there are other issues causing uncertainty.
“The situation in Ukraine has not stabilized. That’s creating additional uncertainty. We’ve got some consternation about our exports in particular to China. The rising value of the dollar is not good for U.S. exports,” he says. “So, there’s really just a lot of things hanging out there that are bothering people. And then, of course, you throw in the whole inflation scenario and the fact that inflation for things like input costs in agriculture have been much higher. There’s a lot of issues out there causing people to be uneasy. (Producers) are still going about their business and doing things more or less as normal, but the sentiment we’re picking up is this idea of unease and uncertainty.”
Farmer sentiment in the latest survey is similar to 2015 levels when the barometer survey was launched.
“We’re getting back pretty close to levels we saw when we first started the barometer at the end of 2015 and the beginning of 2016. One of the interesting things about that is the fact that farm incomes right now have been so much stronger than they were in that timeframe. It’s interesting that sentiment has backed up as much as it has to levels we haven’t seen since that timeframe given how strong income is. if you look at average income over the last two years – 2021 and 2022, which is an estimate from the USDA at this point— and compare that to net farm income that USDA published for 2015 and 2016, income is up 40 percent.”
The monthly national survey of 400 U.S. agricultural producers was conducted Oct. 10-14.
Audio: Jim Mintert