The Purdue University-CME Group Ag Economy Barometer dipped to a reading of 113 in March, the weakest farmer sentiment reading since May 2020 which was in the early days of the pandemic.
The March reading was 12 points lower than a month earlier and 36% lower than in March 2021.
Concern about the impact of rising input prices and input availability on their farming operations was paramount in the minds of producers responding to the March survey.
The war in Ukraine exacerbated producers’ worries about production costs with nearly two-thirds of producers expecting the biggest impact on U.S. agriculture from the war to be on input prices. Uncertainty and supply chain issues continue to hamper producers’ investment plans with over 60% of producers indicating their farm machinery purchase and construction plans for the upcoming year are lower than a year earlier.
Although producers’ perspective on farmland values changed little in March compared to February, it does look like producers are less bullish about farmland values than last fall as three-month moving averages of both the long and short-term farmland value indices in March were 7 to 8 percent below, respectively, their November 2021 peak.
