Ag Economy Barometer: Farmers continue to be less optimistic about ag economy

WEST LAFAYETTE, Ind. — Farmer sentiment about the ag economy declined again in October, according to the Purdue University CME Group Ag Economy Barometer.

The barometer fell to a reading of 102, down 10 points from September. Farmers expressed concerns about both current and future conditions.

Farmer sentiment is on par with that of late 2015 and early 2016, according to the survey.

“The comparison is interesting because this year’s weakness in farmer sentiment is taking place despite very strong net farm income compared to the earlier period,” the report states.

“USDA estimates indicate that U.S. inflation adjusted net farm income averaged across 2021 and 2022 is more than 40% above the 2015-2016 average.”

The Farm Financial Performance Index fell 13 points this month to 86.

Producers continue to worry about high input costs combined with weaker commodity prices.

“Challenging shipping conditions throughout the Mississippi River valley have hampered exports recently and the corresponding widespread weakening of corn and soybean basis levels might be contributing to heightened concerns about financial performance,” the report states.

Looking ahead to next year, over 40% of producers in the October survey view high input costs as their top concern followed by rising interest rates.

After dipping to a new record low last month, the Farm Capital Investment Index improved this month to a reading of 38.

The rise in the investment index was driven by a reduction in the percentage of producers who said now is a bad time to make large investments.

Despite the index’s modest rise in October, the investment index remains near its all-time low.

Producers are concerned about the impact U.S. interest rate policy will have on their farms and the ag economy — with over one-third of crop producers choosing it as the most important policy issue for their farming operation.

View the complete report at https://tinyurl.com/56zwjbsc.