As 2021 starts to wind down, farmer sentiment about the agricultural economy appears to be sliding downward as well. The November reading of the Purdue/CME Group Ag Economy Barometer slipped five points from October to a reading of 116. The Purdue Center for Commercial Agriculture says the reading is 30% lower than the same period a year ago and is the lowest reading of 2021.
Purdue ag economists say the weakness in the barometer was tied to weaker sentiment regarding current conditions as well as weaker expectations for the future.
The barometer reveals producers are concerned about rising input costs with 55% of producers saying they expect input prices to rise 12% or more in the upcoming year, up from 33% who felt that way in October.
“I think we continue to see input costs increase. And I think that’s largely what’s going on here,” said Purdue agricultural economist Mike Langemeier. “I mean, the crop prices really haven’t changed all that much, and particularly the prospects looking ahead later next year. And so, I think this is largely, largely due to rising input costs.”
There are some positive outlooks from the survey. Purdue says strong cash flows in 2021 combined with low interest rates continue to make farmers optimistic about farmland values as both the short-term and long-term farmland value indices remain near their all-time highs.