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.”
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.