The Purdue University/CME Group Ag Economy Barometer dropped five points in November to a reading of 116, as producers continue to be pessimistic about both the current and future outlook of the agricultural economy.
Farmers are facing sharp increases in their cost of production that coincide with fluctuating crop and livestock prices. Other issues of concern are the prospect of changing environmental and tax policy, the uncertainty brought on by COVID-19, and a host of other issues that are all driving down farmer sentiment.
The Farm Capital Investment Index shows 47 percent of respondents listing higher input costs as their biggest concern in the upcoming year. The Farm Financial Performance Index rose two points in November, helped by strong fall crop yields and stronger wheat prices.
Producers remain optimistic about farmland values over the next 12 months and the next five years. Over half the farmers surveyed expect cash rental rates to rise in 2022.
(From the National Association of Farm Broadcasters)]
A breakdown on the Purdue/CME Group Ag Economy Barometer November results can be viewed at https://purdue.ag/barometervideo. Find the audio podcast discussion for insight on this month’s sentiment at https://purdue.ag/agcast.
Tuesday, December 7th, 2021
The Ag Economy Barometer slipped to a reading of 116 in November, down 5 points from October and 30% lower than in November 2020 when the barometer stood at 167. Once again, weakness in the barometer was tied to weaker sentiment regarding current conditions as well as weaker expectations for the future. The Index of Current Conditions declined 7 points in November to 128 and the Index of Future Expectations fell 4 points to 110. November marked the lowest reading of the year for all three measures of producer sentiment as concerns about sharp rises in production costs coincided with concerns about a host of other issues ranging from prices for crops and livestock to environmental and tax policy as well as COVID. The Purdue University-CME Group Ag Economy Barometer sentiment index is calculated each month from 400 U.S. agricultural producers’ responses to a telephone survey. This month’s survey was conducted from November 15 to 19, 2021.
The Farm Financial Performance Index rose 2 points to 106 in November. Unlike the broader sentiment measures, the farm financial index this month was 10% above its low reading of 2021 which occurred back in June. Over the last four months the financial performance index ranged from a low of 104 to a high of 110, a noticeable improvement compared to this year’s lowest readings of 96 and 99 which occurred in June and July, respectively. Recent improvements in the farm financial index compared to late spring were tied in part to strong crop yields for fall harvested crops and strength in wheat prices which helped push crop revenue estimates well above a year earlier. However, despite the modest improvement in the …..
Read the full report “Farmer Sentiment Weakens as Production Cost Concerns Mount ” from James Mintert and Michael Langemeier, Purdue Center for Commercial Agriculture.