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The Purdue University/CME Group Ag Economy Barometer farmer sentiment index rose 14 points in August to a reading 117. The rise in the overall measure of agricultural producer sentiment was driven by increases in both the Index of Current Conditions, which rose nine points to 118 and the Index of Future Expectations, which climbed 16 points to 116.
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 August 15 and 19, after the U.S. Department of Agriculture released both the August Crop Production and World Agricultural Supply & Demand Estimates reports.
Ag Economy Barometer, October 2015-August 2022 (Purdue/CME Group)
As farmers get closer to the end of the year, pricing performance for crops and livestock is more evident. When the survey was conducted this past month, prices were particularly strong. Soybeans rose by about $1.50 per bushel, while prices for fall delivery of corn rose by about $0.25 per bushel. However, since the completion of the August survey, corn and soybean prices have dropped some.
The Farm Financial Performance Index rose in August to 99, which is 100 points higher than a month earlier and 18 points higher to its low point in May. Future expectations rose 16 points with farmers indicating fewer responses from those expecting future bad times for U.S. agriculture, and more responses from those expecting good times.
Despite this more positive outlook, there’s still a large amount of uncertainty among producers about the future costs of items. Input costs remain at the top of the list for concerns. While four out of ten producers expect input costs to decline by as much as ten percent in 2023 compared to 2022, over half expect input prices to rise from one to 20 percent.
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