Ag Sentiment Takes A Nosedive
No other way to say it; farmers are frustrated.
May’s Ag Economy Barometer plummeted 20 points as pessimistic producers weighed current and future farm economic conditions. Just 27% of surveyed growers expect ‘good times’ for U.S. ag in the next five years – the lowest in survey history.
What’s to blame: Producers expressed concern over tax uncertainties and rising input costs. Of producers surveyed:
- 83% expect capital gains tax rates to rise over the next 5 years
- 78% think proposed policies will make it harder to pass on the farm to the next generation
- 43% predict 2022 cash rental rates will jump by 10%+
Crop input prices are also likely to remain high as supply chain concerns plague everything from crop protection ingredients to the cardboard and plastic they’re stored in.
But it’s not all bad. While producer sentiment isn’t high across the board, 54% of respondents expect the crop sector to yield good results in the next five years. Crop producers also remain bullish on farmland values.
Any positive vibes row crop producers may be feeling are not necessarily shared with their dairy and livestock counterparts. Only 26% of those surveyed expect to see ‘good times’ in the animal production space in the next five years.
Where this goes: The short-term impact could be seen in machinery purchases and construction plans. While farm equipment sales are having a heyday now, producers noted less purchase intent in the coming year. And 59% of those surveyed reported lower year-over-year construction plans, including new buildings and grain bins.