WEST LAFAYETTE, Ind. – The Ag economic barometer rose nine points to 125 in December, up from 116 in November, suggesting an increase in optimism about the Ag economy.
“The rise in the barometer was mainly driven by an improvement in the Current Conditions Index, which rose from 128 last month to 146 this month as producers felt better about what was currently going on on their farms,” said Jim Mintert, Director of the Center for Commercial Agriculture at Purdue University.
The Farm Financial Performance Index also rose to 113, an increase of seven points compared to the previous month.
“The percentage of producers who expect their farm to perform better financially has increased by six points,” said Mintert. “The percentage who do not expect any change has decreased by 5 points.”
The Farm Capital Investment Index rose 10 points to 49.
“The proportion of manufacturers who expect reduced machine purchases in the coming year has fallen by six percentage points,” said Mintert. “However, 45% of manufacturers still say that their purchase plans for agricultural machinery are influenced by low machine inventories.”
Producers continue to express reservations about what will happen in 2022.
47 percent of producers in the December poll said higher production costs are their greatest concern for the future.
“Thirty-nine percent of growers said they expect farm input prices to increase by 30% or more in 2022,” Mintert said. “This is an unprecedented increase in farm input prices.”
Thirty-nine percent of producers also said they would have some difficulty purchasing plant auxiliaries for crop year 2022 – from fertilizers to herbicides to agricultural machinery parts.
The full report is available at purdue.ag/agbarometer.