Ag Economy Barometer: Farmers’ optimism up slightly

WEST LAFAYETTE, Ind. — The Ag Economy Barometer rose nine points in December to a reading of 125, up from 116 in November, indicating an increase in optimism about the ag economy.

“The rise in the barometer was driven mostly by an improvement in the Index of Current Conditions, which rose from a reading of 128 last month to 146 this month, as producers felt better about what was taking place on their farms currently,” said Jim Mintert, director of the Center for Commercial Agriculture at Purdue University.

The Farm Financial Performance Index also rose to a reading of 113, up seven points compared to the month before.

“There was a six-point rise in the percent of producers expecting better financial performance on their farm,” Mintert said. “The percentage expecting no change fell by 5 points.”

The Farm Capital Investment Index rose 10 points to a reading of 49.

“The percentage of producers expecting reduced machinery purchases in the upcoming year declined six points,” Mintert said. “However, 45% of producers still say the purchase plans for farm machinery are being impacted by low machinery inventory levels.”

Producers continue to express reservations about what’s going to take place in 2022.

Forty-seven percent of the producers in the December survey said higher input costs are their biggest concern looking ahead.

“Thirty-nine percent of producers said they expect to see farm input prices rise by 30% or more in 2022,” Mintert said. “That’s an unprecedented increase in farm input prices.”

Thirty-nine percent of producers also said they had some difficulty purchasing crop inputs for the 2022 crop year — ranging from fertilizer to herbicide and farm machinery parts.

The full report is available at purdue.ag/agbarometer.