The Purdue University/CME Group Ag Economy Barometer dropped to its lowest level since April 2020, down 22 points in May to a reading of 99.
Agricultural producers’ perceptions regarding current conditions on their farms, as well as their future expectations, both weakened this month.
The Index of Current Conditions dipped 26 points to a reading of 94 and the Index of Future Expectations fell 21 points to a reading of 101.
The Ag Economy Barometer is calculated each month from 400 U.S. agricultural producers’ responses to a telephone survey.
This month’s survey was conducted between May 16-20.
Despite strong commodity prices, this month’s weakness in producers’ sentiment appears to be driven by the rapid rise in production costs and uncertainty about where input prices are headed.
That combination is leaving producers very concerned about their farms’ financial performance.
Higher input costs remain a top concern for producers with 44% of those surveyed choosing it as the biggest concern facing their farming operation in the coming year.
Additionally, 57% of producers said they expect a 30% or more rise in prices paid for farm inputs in 2022 compared to prices paid last year.
The May survey also asked producers about their expectations for input costs in 2023 compared to 2022 with nearly 39% of producers indicating they expect an additional cost increase of 10% or more in the coming year.