Farm Economy Sentiment Sliding
A monthly measurement of farmer sentiment of the agricultural economy is starting 2022 on a downward path. The Purdue University/CME Group Ag Economy Barometer declined six points from December’s reading of 125 and is the second lowest sentiment reading since July 2020.
Purdue economists say the drop is due in large part because of weakening perceptions of current conditions by producers.
During the monthly survey, farmers told Purdue that rising farm input costs and ongoing supply chain disruptions are contributing to producers’ weaker perception of current conditions.
“Problems with supply chain disruptions extend beyond just farm machinery. 28% of corn and soybean producers in this month’s survey say they’ve had difficulty purchasing inputs for the 2022 crop. Inputs they’ve had trouble purchasing range from herbicides, insecticides to fertilizer, as well as farm machinery parts,” said Purdue Center for Commercial Agriculture Director Jim Mintert.
A growing number of producers said they expect to borrow more money in operating loans this year because of those rising costs. One such input is nitrogen, which is key for corn production. Mintert says prices for nitrogen have tripled since this time last year.
“When we asked producers what their plans were for the use of nitrogen on the 2022 crop versus 2021. Nearly four out of 10 (37%) said they plan to reduce the rate of nitrogen they apply to the 2022 corn crop,” explained Mintert.
Twenty-seven percent of respondents said they expect to have a larger operating loan in 2022 than a year earlier, which is 10 points higher than on last year’s survey.
Click here to view analysis of the report from Mintert.