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Farmers surveyed expect their farms’ financial performance to be weaker in ‘23

Farmers are less optimistic about their farms’ financial performance in 2023 compared to last year, according to the latest Purdue University/CME Group Ag Economy Barometer.  

Jim Mintert, director of the Purdue Center for Commercial Agriculture, says many producers are concerned about higher costs and narrowing margins.

“Input costs are going to be, based on our projections at the moment, between five and ten percent higher than they were for 2022,” he says.

He tells Brownfield famers are also concerned about farmland cash rental rates.

“Almost half of the producers in this month’s survey said they think cash rents in 2023 will be higher than they were in 2022 and at this point and time most of those cash rents have already been set,” he says. “So, people are concerned about that. They’re looking at a possible cost-price squeeze so there’s some concern going forward.”

Mintert says, “we wanted to get a contrast as we turn the corner of the New Year when we start asking people consistently about what they think their financial position is going to be in 2023 versus 2022. We wanted to get that look ahead to get that contrast between how much of this is the comparison of 2022 versus 2021 and 2023 and 2022. One thing to keep in mind when people have a weaker income expectation for 2023 compared to 2022 is they’re making a comparison to what was in many cases for many farmers a record farm income level in 2022. The fact that their expectation is for lower income in 2023 compared to 2022 isn’t as bad as it sounds at first glance when you think about the fact that they’re comparing it to a historically strong income year.”  

When asked about their top concern in 2023, 45 percent of producers said higher input costs, 22 percent said rising interest rates, and 13 percent said lower crop or livestock prices.

Audio: Jim Mintert

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