Farmer sentiment toward the ag economy remains stable, according to Purdue’s monthly Ag Economy Barometer.
The latest barometer, which is based on an economic sentiment survey of 400 agricultural producers each month, recorded a reading of 114 – down 1 point compared to a month earlier.
Within the barometer, both the current conditions index and the future expectations also declined one point to 112 and 115, respectively.
As these numbers remain relatively unchanged from November, they’re down quite a bit from this time last year – something Jim Mintert, director of the Purdue Center for Commercial Agriculture, is not surprised by.
“2022 was record highs,” Mintert shared on an episode of the AgriTalk podcast in regard to farm income. “So the fact that the sentiment index is down compared to a year earlier makes a lot of sense.”
Minert also shared a reminder that while sentiment may be lower than it was in 2022, it’s still much higher than earlier in 2023.
“If you look at the current condition index, from September to December, it was up 14%,” he says. “At the end of the year, farm income turned out probably better than people thought it was going to be in late summer – both from a yield perspective and, at least for some of the crops that got sold, stronger prices.”
Outlook for 2024
Despite better-than-expected income levels, the overall balance sheet still weighs heavily on producers’ minds. When asked to share their biggest concerns for the upcoming year, respondents ranked high input costs as No. 1 and lower crop and livestock prices as No. 2.
At the same time, the producers also shared they expect inflation and interest rates to decrease in the year to come, with 70% anticipating inflation to be less than 4% and over half expecting interest rates to remain unchanged or decline.
Mintert says this sentiment could start to translate into more operation investments moving forward due to increased dealer inventories and the expectation for farmland values to decrease.
To hear more about the barometer results, listen to this episode of AgriTalk.
