For only the second time since May, the Purdue University-CME Group Ag Economy Barometer rose in December. This month’s index climbed to 125, nine points higher than in November.
The Index of Current Conditions and the Index of Future Expectations rose in December, attributable mostly to an improved perspective on current conditions in the agricultural sector. A more positive outlook regarding their farm’s financial situation by ag producers was a major contributor to this month’s rise.
However, farmers are concerned about rising input costs, with nearly half of producers choosing it as a top concern for 2022 and supply chain issues continue to haunt the nation’s agricultural sector. Forty-five percent of respondents said tight farm machinery inventories impacted their machinery purchase plans, and 39 percent said they’ve experienced difficulty in purchasing crop inputs for the 2022 crop season.
The index is calculated each month from 400 U.S. farmer responses to a telephone survey.
(From the National Association of Farm Broadcasters)
Farmer Sentiment Rises on Strengthening Current Financial Position
January 4, 2022
James Mintert and Michael Langemeier, Purdue Center for Commercial Agriculture
For only the second time since May, the Ag Economy Barometer rose in December. This month’s index climbed to a reading of 125, 9 points higher than in November. Both the Index of Current Conditions and the Index of Future Expectations rose in December with the rise in the barometer attributable mostly to an improved perspective on current conditions in the agricultural sector. December’s Index of Current Conditions stood at 146, 18 points higher than a month earlier, while the Index of Future Expectations rose just 4 points to 114. A more positive outlook regarding their farm’s financial situation by ag producers was a major contributor to this month’s rise in both the Index of Current Conditions and the barometer. 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 December 8-14, 2021.
The Farm Financial Performance Index rose 7 points to 113 in December which is the index’s highest reading since May. December marked the second month in a row that farmers reported a stronger financial performance for their farms. This month’s rise leaves the financial index just 3 points below its year-ago level and caps a rise of 18 percent since the index bottomed out back in June. Crop producers taking stock of their farms’ relatively strong financial performance in 2021 as the year wound down likely explains the rise in the financial index. Unlike the barometer, this month’s Farm Financial Performance Index was markedly stronger than readings obtained just before the pandemic’s onset. For example, two years ago the financial index stood at 89, 21% lower than this month’s reading.
For just the third time this year, the Farm Capital Investment Index rose in December. The index climbed 10 points to a reading of 49, the most positive value for the investment index since August, but still 47% lower than in December 2020. The investment index’s improvement was primarily the result of …..
Read the full Farmer Sentiment Rises on Strengthening Current Financial Position report.