The Purdue University/CME Group Ag Economy Barometer continued lower in June, down two points to a reading of 97. The barometer’s Index of Future Expectations also dropped, falling five points to a reading of 95, the lowest level since 2016. But producers were slightly more optimistic about their current conditions, as the Index of Current Conditions rose five points to 99, but rising input costs and uncertainty about the future continue to weigh on farmer sentiment.
Many producers in the survey said they’re concerned about the ongoing rise in production costs and volatile commodity prices, two factors that could lead to a production cost-income squeeze in 2023.
The Farm Financial Performance Index, which deals with income expectations in the current year, rose two points in June to 83. However, that’s still the lowest level for the index during the past two years. Input prices and availability continue to be the top concerns for U.S. producers.
(From the National Association of Farm Broadcasters)
Farmer Sentiment Remains Weak, Crop Producers Contemplating Acreage Shifts in 2023
James Mintert and Michael Langemeier, Purdue Center for Commercial Agriculture
Farmer sentiment remained weak in June as the Purdue University-CME Group Ag Economy Barometer fell to a reading of 97, 2 points below its May reading. During June farmers were a bit more optimistic about current conditions as the Current Conditions Index of 99 was 5 points higher than in May. However, the small improvement in current conditions was more than offset by weaker expectations for the future, as the Index of Future Expectations declined 5 points to a reading of 96, the lowest level since October 2016. Rising costs and uncertainty about the future continue to be a drag on farmer sentiment. This month 51% of survey respondents said they expect their farms to be worse off financially a year from now, the most negative response received to this question since data collection began in 2015. 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 June 13-17, 2022.
Although producers said they expect their farm’s financial condition to be worse in June 2023 compared to June 2022, the Farm Financial Performance Index actually improved slightly to a reading of 83 compared to 81 in May. Responses received to the Farm Financial Performance Index question are primarily reflective of income expectations for 2022. On the other hand, the question that asks them about financial conditions a year from now brings into play concerns about the ongoing escalation in production costs, in addition to concerns about commodity price volatility, which could lead to a production cost/income squeeze taking place in 2023. Still, even with the small rise in the financial performance index, it remained one of the index’s lowest readings of the last two years.
The Farm Capital Investment Index remained at …..