WEST LAFAYETTE, Ind. — Rapidly rising production costs are a concern for agricultural producers, according to the Purdue University/CME Group Ag Economy Barometer.
The barometer fell for the second month in a row in June.
Nearly 30% of producers said they expect farm input prices to rise by 8% or more in the upcoming year. That would be more than four times the average rise over the last 10 years of just 1.8%.
“The Farm Capital Investment Index fell to a reading of 54, down from 65 a month earlier,” said Jim Mintert, director of the Center for Commercial Agriculture.
“It puts the Investment Index about 10% below where it was this time last year. The weakness in the Capital Investment Index seemed to focus more on construction than machinery.”
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The percentage of producers planning to reduce construction rose to 61% in June compared to 58% in May.
“If you look at farm machinery purchase plans, the biggest shift was in the percentage of producers planning to hold purchases constant rising to 45% from 40% in May,” Mintert said.
Read the full Ag Economy Barometer report at purdue.ag/agbarometer.