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Producers are more optimistic about their farm’s financial performance

Farmers surveyed in the latest Ag Economy Barometer are more optimistic about their farm’s financial performance than they were in the spring.

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

“We’re far enough into the year in 2022 that people are starting to look at where they’re at with yields and prices and that’s why they feel better about things than they did back in May and June,” he says. “There’s a lot less uncertainty out there with respect to how things are going to turn out in 2022.”

In May, nearly 40 percent of respondents said they expected their farm’s financial performance in 2022 to be worse than in 2021. This month that percentage declined to 29 percent, while the percentage expecting better performance rose from nearly 20 percent in May to about 30 percent this month.

But, Mintert says input cost concerns are impacting sentiment.

“Farmers are concerned about what they’re going to pay for fertilizer. People are thinking about if they should be applying fertilizer this fall. Whether they’re looking at nitrogen or dry fertilizer, those values are substantially higher than we’re acclimated to,” he says. “That’s creating a lot of uncertainty in terms how much of those high-priced inputs do I want to lock in, not knowing for sure what I’m going to wind up with respect to revenue next year. It’s raised the risk level and I think that’s really holding us back in terms of seeing stronger sentiment on that farm financial performance index.”

The Purdue University/CME Group Ag Economy Barometer is a monthly national survey of 400 U.S. agricultural producers.