Farmers more positive in August
Producers becoming increasingly concerned about farm input price inflation.
Source: Purdue University/CME Group
via National Hog Farmer - Sep 07, 2021
The Purdue University/CME Group Ag Economy Barometer improved in August, up 4 points to a reading of 138. The modest rise was attributable to improvements in both of the barometer's sub-indices. The Index of Current Conditions rose 9 points to a reading of 152 and the Index of Future Expectations rose 2 points to a reading of 132. 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 23-27, 2021.
In August, producers had a more positive view of their farms' financial situation than earlier this summer. The Farm Financial Performance Index rose 11 points to 110, its highest reading since May, as more farmers indicated they expect profitability to be better this year compared to 2020.
"Although corn, soybean, and wheat prices have declined in recent weeks, farmers have more confidence in their 2021 revenue expectations," said James Mintert, the barometer's principal investigator and director of Purdue University's Center for Commercial Agriculture. "Yield prospects stabilized or improved for many producers in August as some precipitation fell in areas that had been abnormally dry and drought-stricken. That helps explain this month's improvement in the Farm Financial Performance and Current Conditions indices."
Producers are becoming increasingly concerned about farm input price inflation. On the August survey, 39% of respondents said they expect input prices to rise by 8% or more in the next 12 months, up from 30% who felt that way in both June and July. One in five producers (21%) expect farm input price inflation to exceed 12% in the next 12-months. Just 13% of producers surveyed said they expect input price pressure in the upcoming year to fall in a range of 0-2%, which would be similar to the average rise in farm input prices over the last decade.
Both the Short-Term and Long-Term Farmland Values Expectations Indices rose by 4 points...
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