Rising production costs appear to be having minimal impact on Purdue University’s monthly survey of how the country’s farmers feel about the state of the agriculture sector.
The latest Purdue University/CME Group Ag Economy Barometer rose 6 points to 125 in February, slightly higher than January. The Index of Current Conditions was down 1 point to 132, while the Index of Future Expectations improved 10 points to 122.
The Ag Economy Barometer is calculated each month from 400 U.S. agricultural producers’ responses to a telephone survey. This month’s survey was conducted between Feb. 14 and 18 prior to Russia’s invasion of Ukraine.
The Farm Financial Performance Index remained unchanged in February at a reading of 83. However, the sharp drop in the index, down 27% from late 2021 to 2022, indicates producers expect financial performance in 2022 to be worse than in 2021, Purdue researchers said.
The financial index is generated based on producers’ responses to whether they expect their farm’s current financial performance to be better than, worse than or about the same as the previous year. These survey responses suggest that concerns about the spike in production costs and supply chain issues continue to mostly outweigh the impact of the commodity price rally that’s been underway this winter, researchers said.
Higher input costs have consistently been the top concern identified by farmers during the past six-months, according to results from the Ag Economy Barometer survey.
Tight machinery inventories continue to be a problem, researchers said. In February, more than 40% of producers said low farm machinery inventories are holding back their investment plans. While plans for farm building and grain bin construction were more optimistic in February, 56% noted their plans for new construction are below the previous year.
The complete survey is available on Purdue University/CME Group Ag Economy Barometer website.