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Oct 06, 2021

Farmer Sentiment Declines in September

Ag Economy Barometer shows producers' inflation expectations jump

source: Purdue Center for Commercial Agriculture

Sentiment among agricultural producers weakened in September as the Ag Economy Barometer declined 14 points to a reading of 124.

This is the weakest farmer sentiment reading since July 2020 when the index stood at 118.

Producers were less optimistic about both current and future conditions on their farms and the agricultural sector than they were a month earlier.

Although the Farm Financial Performance Index was unchanged this month, there was a shift in financial expectations with fewer producers expecting performance similar to last year and more producers expecting both better and worse performance than a year earlier.

Weaker farmer sentiment spilled over into the Farm Capital Investment Index, although over half of this month’s respondents said that low farm machinery inventories impacted their purchase plans.

There was a sharp rise in farmers’ expectations regarding farm input price inflation with more than one-third of respondents expecting input prices to rise by more than 12% in the upcoming year.

Farmer optimism about future growth in agricultural exports continues to wane, and that, combined with concerns about a squeeze on operating margins, could be contributing to weakness in farmer sentiment.

Despite the weakness in farmer sentiment, farmers remain bullish about farmland values with the Long-Term Farmland Values Index reaching a record high this month.

Read or download the full report here.

A breakdown on the Purdue/CME Group Ag Economy Barometer September results can be viewed at purdue.ag/barometervideo. Find the audio podcast discussion for insight on this month’s sentiment at purdue.ag/agcast.

Authors: James Mintert and Michael Langemeier, Purdue Center for Commercial Agriculture

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