WEST LAFAYETTE, IN – Volatility in commodity markets combined with historic increases in crop input prices are leading farmers and ranchers down a road of growing pessimism. That’s according to the latest Purdue University/CME Group Ag Economy Barometer, which slipped 5 points in November (116 points) and marked the lowest reading of 2021 and a 30 percent drop in producer sentiment since November of 2020.
Dr. Jim Mintert is Director for the Center for Commercial Agriculture at Purdue and explains that “farmers are facing sharp rises in production costs coinciding with fluctuating crop and livestock prices, the prospect of changing environmental and tax policy, uncertainty over COVID-19, as well as a host of other issues, all of which are negatively impacting farmer sentiment.”
Rising production costs, including those for fertilizer, farm machinery, seed, and fuel, are of increasing concern to farmers. For example, Mintert explains, “43 percent of survey respondents said they expect farm input prices to rise by more than 16 percent in the upcoming year. This compares with the actual average rate of farm input price inflation over the past decade of less than 2 percent.”
In addition, the Index of Current Conditions declined 7 points (128) and the Index of Future Expectations fell 4 points (110) as responses from 400 U.S. agricultural producers between November 15-19, 2021 set the data points for the overall Barometer.
(SOURCE: All Ag News)