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According to the university, the Purdue University/CME Group Ag Economy Barometer was a nationwide measure of the health of the US agricultural economy.
The current surge in confidence was being ascribed to high commodity prices during harvesting in the past season.
The steep 24-point climb in the Ag Economy Barometer “was motivated by producers’ stronger perception of current financial conditions on their farms,” said agricultural economists James Mintert and Michael Langemeier, commenting on the latest results..
According to the Successful Farming website: “while producers said 2022 was a better year financially than 2021, in line with US Department of Agriculture [USDA] estimates of record-high net farm income in 2022, their euphoria faded when asked about the new [season]”.
“Producers indicated that they expect financial performance in 2023 to fall,” Mintert and Langemeier, the overseer of the barometer said. “Rising costs and narrowing margins are key reasons.”
Commenting on the outlook for 2023 in a USDA Radio interview, USDA chief economist Seth Meyer said there were some uncertainty about 2023, despite achieving two consecutive years of the highest-ever income for the sector.
“Will we see some moderation in commodity prices? Will there be continued concern about input prices?” Meyer asked.
“Concerns about costs continue to be top of mind for producers when asked to look ahead,” he said.
According to the barometer, about 45% of producers said higher input costs were their main concern, followed by increasing interest rates, at 22%.
In addition, about 50% of producers said they expected the cash rental rates for farmland to be higher this year than in 2022.
Compared with a month earlier, farmers’ assessment of their financial position was significantly higher in the barometer’s December survey than it was a month earlier.
“The change in perception among producers regarding their farms’ financial situation could be attributable to producers taking time to estimate their farms’ 2022 income following the completion of the autumn harvest,” Mintert and Langemeier added.
