There’s a storm a-brewin’.
At least that’s what it looked like when the barometer tanked earlier this week. Or to be more accurate, the Ag Economy Barometer.
Gloomy forecast: When Purdue University and CME Group released the Ag Economy Barometer report for the month of May, the message was clear—farmers aren’t exactly in a “glass half full” mood.
Researchers pulled out their phones and dialed up 400 producers, asking them questions to gauge their sentiment regarding the current and future outlook for their farms.
And when the results were tallied… well… it wasn’t good. The index dropped 22 points to a dismal 99… about the same level we saw when COVID made its grand entrance early in spring 2020.
And it’s not looking up: 38% of producers said they expect their farm’s financial performance to get even worse this year.
So what’s driving the depression? You guessed it…input costs.
As those cringe-worthy fuel and fertilizer bills stack up, last year’s sunshine has morphed into a cumulonimbus catastrophe. Yeah, we had to look that word up too.
Soundbite: According to James Mintert of Purdue University’s Center for Commercial Agriculture, the “rapid rise” in costs and “uncertainty” about future input prices is “leaving producers very concerned about their farms’ financial performance.”
Is the worst yet to come? According to farmers, yeah, it is. When it’s all said and done, 57% of them say they expect 2022 input costs to rise 30% over their 2021 prices. Ouch.
Here’s to hoping that prices (inputs… not commodities) tank this summer/fall as much as farmers’ current economic outlook.