WEST LAFAYETTE, Ind. — Farmers were slightly more optimistic about the economy in August compared to July, according to the Purdue University/CME Group Ag Economy Barometer.
The barometer rose four points to a reading of 138.
“Although corn, soybean and wheat prices have declined in recent weeks, farmers have more confidence in their 2021 revenue expectations,” said James Mintert, director of Purdue’s Center for Commercial Agriculture.
“Yield prospects stabilized or improved for many producers in August as some precipitation fell in areas that had been abnormally dry and drought-stricken. That helps explain this month’s improvement in the Farm Financial Performance and Current Conditions indices.”
Farmers are concerned about farm input price inflation, the barometer showed.
Thirty-nine percent said they expect input prices to rise by 8% or more in the next 12 months, up from 30% who felt that way in both June and July.
One in five producers expect farm input price inflation to exceed 12% in the next 12 months.
Producers remain optimistic that farmland values will continue to rise. At the same time, about one-half of corn and soybean growers expect farmland cash rental rates to rise above 2021 levels in 2022.
The Farm Capital Investment Index leveled out after four consecutive months of declines, up three points to a reading of 53.
“Industry reports continue to suggest that supply chain challenges are hampering farmers’ machinery purchase plans and could also be playing a role in reduced construction activity,” Mintert said.
The survey included a series of cover crop questions.
Nearly two-thirds of respondents indicated they currently use or have used cover crops in the past.
Among producers currently using cover crops, nearly half began planting cover crops within the last five years, while 29% have been planting cover crops for 10 years or more.
Learn more at ag.purdue.edu/commercialag/ageconomybarometer.
In A Nutshell
• Farmers were more optimistic about the ag economy in August compared to earlier this summer.
• Farmers are concerned about farm input price inflation.
• Nearly two-thirds of farmers indicated that they use or have used cover crops.