Farmer pessimism about the economy is at its lowest in nearly a decade. That’s according to a recent survey conducted by the Purdue Center for Commercial Agriculture.
The Purdue University-CME Ag Economy Barometer Index for September was at 88. That’s down 12 points from the August survey and 25 from July’s results. It’s also down 18 points from where the index was a year ago, with growers’ concerns for both the future and present leading to steep drops in both subcategories.
The overall index and the future score both are at their lowest points since March 2016, while the current conditions score has only been lower in the throes of the COVID-19 pandemic.
“We continue to ask producers about their biggest concerns for their farming operation in the upcoming year, and the top concern continues to be high input cost followed by lower crop and livestock prices,” said Jim Mintert, a Purdue professor and the center’s director in a video releasing the results.
Combined, two-thirds of those surveyed identified those as their biggest concerns for the next year, with 34% citing input costs and 33% worrying about prices. Another 17% are anxious about the potential for higher interest rates.
Thanks to the concerns over both income expectations and interest rate increases, more farmers said they expect their land values to decline over the next year rather than rise. Because of that, the short-term farmland value index fell 10 points to 95 last month. It’s the first time that index had dropped under 100 since the summer of 2020.
Surveyors also found that only 26% are optimistic farm exports will increase over the next five years. That’s the lowest score that question has received in the five years it’s been asked. Further, 78% anticipate changes in government policies after the November election.
Mintert added that more farmers are scaling back plans to make significant investments in their operations. In June, 53% said they were planning to spend less on machinery. That rose to 69% in September, while only 13% believe the current market is a good time to invest.
“Among those producers, the top choice for why it was a good time is that relatively high inventory is carried by most machinery dealers,” Mintert said.
