Higher input costs are still the number one concern among survey respondents with the shift in U.S. monetary policy rising to the forefront as an issue among U.S. producers. This month 44% of respondents chose “higher input costs” as their number one concern, down from 53% last month. Second on the list of producers’ concerns for the upcoming year was “rising interest rates”, chosen by 23% of respondents, up from 14% in August.

This month’s Farm Financial Performance Index showed that compared to earlier this year, producers clearly feel better about their farm’s financial performance.

The Farm Capital Investment Index declined to a record low of 31 in September as producers continue to indicate that they do not view this as a “good time” to make large investments in their farming operations. Despite that negative perspective, the percentage of producers who plan to reduce their farm machinery purchases declined again this month, down 2 points compared to responses in August. Since peaking in March at 62 percent, the share of producers who plan to reduce their machinery purchases compared to a year earlier has been declining, dipping to 47% this month.

For the third month in a row, producers overwhelmingly said it was primarily because of the increase in prices for farm machinery and new construction. However, interest rates are starting to become a factor influencing producers’ decision making. Throughout the summer the percentage of farmers who chose “rising interest rates” as a primary reason for thinking it’s a bad time to make large investments rose from 14% in August to 21% in September.

Producers are also becoming increasingly worried about the impact of rising interest rates on their farm operations with more of them citing it as a reason why they think now is not a good time to make large investments.

The Purdue University-CME Group Ag Economy Barometer sentiment index is calculated each month from 400 U.S. agricultural producers’ responses to a telephone survey. 

See complete survey results

Mintert says the latest Purdue University/CME Ag Economy Barometer survey asked farmers where they saw the financial health of the operation heading in the next year.

He tells Brownfield, “The last two months the two highest, most negative responses to that question we’ve ever gotten since we started collecting data,” Mintert said. “Roughly half the people in the survey are telling us they think their financial position is going to deteriorate over the next 12 months.”

Mintert will be a general session speaker during our Fall Marketing & Distribution Convention in Orlando – October 25-27. Meeting registration is now open, with early registration discounts available through August 15.

Jim joined Purdue’s faculty in 2009 and worked as the assistant director of Extension for agriculture and natural resources before taking on his director responsibilities at the center.

Prior to his time at Purdue, Jim was a professor and Extension state leader in the Department of Agricultural Economics at Kansas State University for 23 years. He holds a bachelor’s and master’s degree in agricultural economics from Purdue University and a doctorate from the University of Missouri.

Over the course of his career, Jim has received numerous awards, including Outstanding Extension Program Awards from both the American Agricultural Economics Association and the Western Agricultural Economics Association, in addition to the American Agricultural Economics Association’s Premier Forecaster Award for his livestock production and price forecasts. Jim is also the author of more than 200 publications focusing on the economics of the livestock industry.

Purdue ag economist James Mintert reviews the results from the June 2020 Ag Economy Barometer survey, a nationwide monthly survey of 400 ag producers. Farmer sentiment improved for the second month in a row, rebounding from sharp declines that took place in both March and April. The improvement in farmer sentiment left the Ag Economy Barometer 7 percent below one year earlier, while the Index of Future Expectations was still 10 percent below its June 2019 level. The Index of Current Conditions, however, was two percent higher than in June 2019, likely reflecting considerably improved spring planting conditions throughout much of the nation, in addition to support from USDA’s Coronavirus Food Assistance Program (CFAP).

The full report entitled “Farmer Sentiment Rebounds Amidst Ongoing COVID-19 Concerns” is available at . Download and listen to Purdue Commercial AgCast podcast which includes a detailed discussion of each month’s barometer, in addition to recent agriculture news that impacts farmers. Available now at .