High Input Costs and Rising Interest Rates Concern Farmers
Farmer sentiment was unchanged in November compared to October, with the Ag Economy Barometer Index remaining at 102. This month鈥檚 survey was conducted the week following the November U.S. elections but, there did not appear to be a noticeable sentiment swing attributable to the election outcomes.
The Farm Capital Investment Index dropped back to its record low of 31 in November. This month鈥檚 decline of 7 points pushes the reading back to its September level, erasing the modest rise in the index that took place in October. It鈥檚 become increasingly clear that the index is capturing the perception among producers that this is not a good time to make large investments because prices for farm machinery and construction are high.
This month just 10% of respondents said now is a 鈥済ood time鈥 to make large investments while 79% said it was a 鈥渂ad time鈥. Among the nearly 80% of respondents who said now is a 鈥渂ad time鈥 to make large investments, almost half (47%) chose 鈥渞ising prices of farm machinery and new construction鈥 as the primary reason for their perspective.
Looking ahead to 2023, producers continue to cite high input costs as their number one concern. Finally, just over one- fourth of respondents said they鈥檝e made changes in their farm operation in response to a sharp rise in energy costs.
The Purdue University-CME Group Ag Economy Barometer sentiment index is calculated monthly from 400 U.S. Agricultural producers’ responses to phone survey.
See complete results from the Ag Economy Barometer