WEST LAFAYETTE, Ind. and
CHICAGO, March 1, 2022 /PRNewswire/ -- Farmer
sentiment continues to fluctuate month-to-month as the Purdue University/CME Group Ag Economy Barometer
rose 6 points to a reading of 125 in February, a mirror image of
the previous month. The Index of Current Conditions was down
1 point to a reading of 132, while the Index of Future
Expectations improved 10 points to a reading of 122. 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 February 14-18, 2022, days prior to Russia's invasion of Ukraine.
The Farm Financial Performance Index remained unchanged
in February at a reading of 83. However, the sharp drop in the
index, down 27% from late 2021 to 2022, indicates producers expect
financial performance in 2022 to be worse than in 2021. The
financial index is generated based upon producers' responses to
whether they expect their farm's current financial performance to
be better than, worse than or about the same as the previous
year.
"These survey responses suggest that concerns about the spike in
production costs and supply chain issues continue to mostly
outweigh the impact of the commodity price rally that's been
underway this winter," said James
Mintert, the barometer's principal investigator and director
of Purdue University's Center for
Commercial Agriculture.
Higher input costs have consistently been the number one concern
identified by farmers over the past six-months, according to
results from the Ag Economy Barometer survey. To gain
additional insight into the concerns of producers, this month
respondents were provided with a more detailed set of possible
responses when answering this question. While a majority still
consider input costs as their number one concern (47%), it was
followed by lower output prices (16%), environmental policy (13%),
farm policy (9%), climate policy (8%), and COVID-19's impact
(7%).
Tight machinery inventories continue to be a problem. In
February, over 40% of producers stated that low farm machinery
inventories are holding back their investment plans. While plans
for farm building and grain bin construction were more optimistic
this month, 56% still said their plans for new construction are
below the previous year.
Thirty-percent of corn and soybean producers say they've had
difficulty purchasing crop inputs from their suppliers. In a
follow-up question posed to corn and soybean producers who said
they experienced difficulty procuring inputs, herbicides are the
most problematic input to source followed by fertilizer and farm
machinery parts. To learn more about how crop producers are
responding to surging fertilizer prices, corn producers were again
asked if they plan to change their nitrogen fertilizer application
rate in 2022 compared to the rate used in 2021. One-third of corn
producers in this month's survey said they plan to use a lower
nitrogen application rate this year than in 2021, compared to 37%
of corn producers who said they planned to reduce their nitrogen
application rate when surveyed in January.
Each winter, the barometer survey asks producers to project
their farm's annual growth rate over the next 5 years. In 2022, 53%
stated they either had no plans to grow or plan to retire/exit in
the next five years, 19% expect their farm's annual growth rate to
range from 5-10%, while 18% expect their farm's annual growth rate
to be less than 5%.
The need for better broadband coverage in rural areas has been
highlighted in several legislative proposals at both the state and
national level. The February barometer survey included a question
asking respondents to characterize the quality of their farm's
internet access. Just three out of ten respondents said they had
"high quality" internet access, 41% said "moderate quality," 16%
chose "poor quality" on the survey, while 12% stated that they did
not have internet access at all. Responses to this question suggest
that nearly three out of ten farms in this month's survey are
unable to take advantage of many applications and services which
require reasonable quality internet access.
Read the full Ag Economy Barometer report at
https://purdue.ag/agbarometer. The site also offers additional
resources – such as past reports, charts and survey methodology –
and a form to sign up for monthly barometer email updates and
webinars.
Each month, the Purdue Center for Commercial Agriculture
provides a short video analysis of the barometer results, available
at https://purdue.ag/barometervideo. For even more
information, check out the Purdue Commercial
AgCast podcast. It includes a detailed breakdown of each
month's barometer, in addition to a discussion of recent
agricultural news that affects farmers. Available now
at https://purdue.ag/agcast.
The Ag Economy Barometer, Index of Current Conditions and Index
of Future Expectations are available on the Bloomberg Terminal
under the following ticker symbols: AGECBARO, AGECCURC and
AGECFTEX.
About the Purdue University Center
for Commercial Agriculture
The Center for Commercial Agriculture was founded in 2011 to
provide professional development and educational programs for
farmers. Housed within Purdue
University's Department of Agricultural Economics, the
center's faculty and staff develop and execute research and
educational programs that address the different needs of managing
in today's business environment.
About CME Group
As the world's leading and most
diverse derivatives marketplace, CME Group
(www.cmegroup.com) enables clients to trade futures, options,
cash and OTC markets, optimize portfolios, and analyze data –
empowering market participants worldwide to efficiently manage risk
and capture opportunities. CME Group exchanges offer the widest
range of global benchmark products across all major asset classes
based on interest rates, equity indexes, foreign
exchange, energy, agricultural
products and metals. The company offers futures and
options on futures trading through the CME Globex® platform,
fixed income trading via BrokerTec and foreign exchange trading on
the EBS platform. In addition, it operates one of the world's
leading central counterparty clearing providers, CME
Clearing.
CME Group, the Globe logo, CME, Chicago Mercantile Exchange,
Globex, and, E-mini are trademarks of Chicago Mercantile
Exchange Inc. CBOT and Chicago Board of Trade are trademarks of Board
of Trade of the City of Chicago,
Inc. NYMEX, New York Mercantile Exchange and ClearPort are
trademarks of New York Mercantile Exchange, Inc. COMEX is a
trademark of Commodity Exchange, Inc. BrokerTec and EBS are
trademarks of BrokerTec Europe LTD and EBS Group LTD,
respectively. Dow Jones, Dow Jones Industrial Average,
S&P 500 and S&P are service and/or trademarks of Dow Jones
Trademark Holdings LLC, Standard & Poor's Financial Services
LLC and S&P/Dow Jones Indices LLC, as the case may be, and have
been licensed for use by Chicago Mercantile Exchange Inc. All
other trademarks are the property of their respective owners.
Writer: Kami Goodwin,
765-494-6999, kami@purdue.edu
Source: James Mintert, 765-494-7004,
jmintert@purdue.edu
Related websites:
Purdue University Center for Commercial
Agriculture: http://purdue.edu/commercialag
CME Group: http://www.cmegroup.com/
Photo Caption: Farmer sentiment rises during commodity price
rally; concern over production costs remains. (Purdue/CME Group Ag
Economy Barometer/James
Mintert).
https://www.purdue.edu/uns/images/2022/ag-barometer222LO.jpg
CME-G
View original
content:https://www.prnewswire.com/news-releases/farmer-sentiment-rises-during-commodity-price-rally-concern-over-production-costs-remains-301492715.html
SOURCE CME Group