Farmer confidence shrinks ahead of planting season
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The Purdue University-CME Group Ag Economy Barometer Index dipped five points in February as farmers expressed concern about higher costs for the upcoming planting season, shrinking confidence in future growth of U.S. agricultural exports, and weakening farmland values. The negative outlook is exacerbated by the U.S. Department of Agriculture’s most recent farm sector income forecast, which is a broad measure of profits. USDA economists are forecasting an approximate 16% decrease from last year.
Despite strong farm income last year, 72% of producers said it is a “bad time” to make large investments in their farming operation, while just 15% reported it is a “good time” to make such investments.
“The disparity between producers’ responses to the question and actual farm equipment sales continues to be focused on costs,” said Jim Mintert, director of the Purdue Center for Commercial Agriculture.
Of those who said now is a “bad time” to make large investments, 45% of respondents said it was because of an increase in prices for farm machinery and new construction.
Mintert says farmers continue to point to concerns about higher input costs with 38% of respondents saying it’s their top concern. Twenty-four percent said rising interest rates is their biggest challenge for the year ahead.
Click here to access Purdue’s Ag Economy Barometer.