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Farmer sentiment is up despite inflation concerns  

Farmer sentiment improved in August despite concerns about rising costs, according to the latest Purdue University/CME Group Ag Economy Barometer.   

Jim Mintert is the director of the Purdue Center for Commercial Agriculture.

“Farmers are still really concerned and a huge amount of that is related to what it’s going to cost to put in a crop or to make livestock ready for market,” he says. “Output prices are an issue as well and then on the consumer side, you bring in some concerns about inflation in general and so there’s just a lot of anxiety and unease out there.”

He tells Brownfield commodity prices in July and August aided farmer sentiment.

“From the time we collected data in July to the time we collected data in August was a timeframe when commodity prices improved, particularly crop prices,” he says. “After we finished collecting data in mid-August, we’ve seen weakness in commodity prices since then, particularly on the crop side, so it will be interesting to see where we go in September.”

The overall Ag Economy Barometer rose 14 points to a reading of 117 in August. The index of Current Conditions was up nine points to 118 and the Index of Future Expectations rose 16 points to a reading of 116. Despite this month’s improvement in sentiment, all three indices are below year ago levels.

Mintert says it was surprising that the Index of Future Expectations increased more than the Index of Current Conditions.

“We didn’t expect that. What happened with commodity prices probably tied a little more to current conditions than future expectations. But, if folks are looking at prices they might receive with respect to fall harvest carrying into 2023, maybe that would explain that,” he says. “We did see a rise in the Future Expectations Index. That’s been a challenge lately going back to the beginning of 2021 and maybe even the tail end of 2020. We’ve seen weaker readings for the Index of Future Expectations than the Index of Current Conditions for most of that time and a lot of that reflects anxiety about where we’re headed and the uncertainty. I think the fact that we have so much uncertainty with respect to cost of inputs and the supply of inputs is unprecedented and that’s really created some weakness in all the indices.”

This month’s national survey of 400 U.S. agricultural producers was conducted August 15-19.

Audio: Jim Mintert