Purdue University/CME Group’s Ag Economy Barometer plummeted 22 points in May to a reading of 99, making last month the lowest level since April 2020.
April’s numbers looked promising with an improvement of 8 points, although it remained 32% below its reading from the same time last year.
Agricultural producers’ perceptions concerning current farming conditions and future expectations weakened in May. The Index of Current Conditions fell 26 points to a reading of 94, with the Index of Future Expectations dipping 21 points to a reading of 101.
“Despite strong commodity prices, this month’s weakness in producers’ sentiment appears to be driven by the rapid rise in production costs and uncertainty about where input prices are headed,” said James Mintert, the barometer’s principal investigator and director of Purdue University’s Center for Commercial Agriculture, in a release. “That combination is leaving producers very concerned about their farms’ financial performance.”
The Farm Financial Performance Index decreased 14 points to a reading of 81.
The index dipped 41% below its life-of-survey high of 138 over the past 13 months.
The Farm Capital Investment Index
The Farm Capital Investment Index hit an all-time-low this past month, dropping 30 points from the same time last year.
Half of producers stated their machinery purchase plans were affected by lower farm machinery inventory levels, 9% more than April’s survey. This suggests supply chain issues play a role in ongoing weaknesses in the capital investment index, shared the release.
Increased input costs are a top concern for producers. In fact, 44% of those surveyed chose input costs as the biggest concern for the coming year, with 57% of producers expecting a 30% or more increase in farm input prices compared to the previous year.
The May survey also questioned producers about their predictions for 2023 input costs. Nearly 39% of producers indicated they expect an additional increase of 10% or more compared to 2022.
Farmland Value Expectations Index
Farmers’ optimism persists toward farmland values, with the Short-Term Farmland Value Expectations Index rising one point to a reading of 145. The Long-Term Farmland Value Expectations Index rose 8 points to a reading of 149.
Read More About Farming Updates:
Farmer Sentiment Increases, but Anxiety Hangs in the Distance
Prospective Plantings Report Shows Soybean, Not Corn, New King Crop
