A monthly reading of farmer sentiment about the economy was unchanged in November even as producers continue to worry about high input costs and rising interest rates. The Purdue University-CME Group Ag Economy Barometer Index came in at a reading of 102, the same as in October.
There were, however, mixed signals in two sub-indices. Purdue economists say the Index of Current Conditions declined, but the Index of Future Expectations climbed higher.
“The index of current conditions was down three points versus last month. But that leaves that index 23% lower than it was a year ago. The future expectations index was actually up two points this month compared to a month ago. But that leaves that index 5% below where it was in November of 2021,” said Jim Mintert, director of the Purdue Center for Commercial Agriculture.
This month’s survey was conducted the week following the November U.S. elections but, Mintert says unlike the period immediately following the two most recent presidential elections, there did not appear to be a noticeable sentiment swing attributable to the election outcomes.
The barometer shows a large majority of farmers (47%) think high prices for farm machinery and new construction make now a bad time to make large investments in their farming operations. The next highest response was rising interest rates with 19% of respondents.
Mintert says although most producers expect farmland values to rise over both the next 12 months and the next five years, the percentage of producers who think values will decline in the year ahead has been rising.
“Once again, we followed up and asked producers who said they expect to see farmland values rise over the next five years. What the main reason for that expectation was and the number one choice again continues to be non farm investor demand this month chosen by 52% of the respondents in the survey, followed by inflation at 26%,” said Mintert.
Looking ahead to 2023, producers continue to cite high input costs as their number one concern.
Click here to access the full Ag Economy Barometer report.