WEST LAFAYETTE, Ind. — Farmers were less optimistic in May compared to April, according to the Purdue University/CME Group Ag Economy Barometer.
The barometer dropped 20 points last month to a reading of 158, down from 178 in April.
“Even with the decline that still leaves the index far higher than it was this time last year,” said James Mintert, director of the Center for Commercial Agriculture.
The Farm Capital Investment Index fell 10 points in May.
There was an increase in the number of farmers who said they planned to reduce their farm machinery purchases in May versus April.
Fifty-nine percent of producers said they plan to reduce their purchases and construction of new farm buildings or grain bins.
“Rising construction costs are likely a contributing factor to weaker construction plans,” Mintert said.
Farmers continue to be very bullish about farmland values.
The Long-term Farmland Value Expectation Index rose 10 points to a record high of 158 this month.
“We asked farmers about their cash rental expectations for the 2022 crop season,” Mintert said. “Thirty-nine percent said they expect cash rental rates for farmland to rise by 5% to 10%. Forty-three percent expect rates to rise by 10% or more.”
When asked if they expect to see good times in agriculture, crop farmers were optimistic while livestock farmers were pessimistic.
The survey also asked farmers about views on tax policy changes under consideration in Washington, D.C.
“Overwhelmingly, farmers are telling us that they’re very concerned about changes in tax policy making it more difficult to pass their farm on to the next generation of farmers in their family,” Mintert said.
Read the full Ag Economy Barometer report at purdue.ag/agbarometer.