Farmers’ Moods Improve from January to February

The Purdue University-CME Group Ag Economy Barometer rose 6 points in February to 125, matching the sentiment index’s reading from December.

A more optimistic view of future conditions pushed the sentiment measure higher as the Index of Future Expectations rose 10 points in February to 122, the most positive reading regarding the future provided by farmers since last August.

The Index of Current Conditions was virtually unchanged at 132, just one point below a month earlier.

The sentiment index is calculated each month from 400 U.S. agricultural producers’ responses to a telephone survey. This month’s survey was conducted from February 14-18, which preceded Vladimir Putin’s invasion of Ukraine.

The Farm Capital Investment Index, which measures farmers’ willingness to invest, drifted lower by three points in February to 42. Half the producers in this month’s survey said their plans for farm machinery purchases in the upcoming year are lower than a year earlier. Tight machinery inventories continue to be an issue; more than 40 percent of producers in this month’s survey say that low farm machinery inventories are holding back their investment plans.

Amid the optimism was alarm about the spike in production costs. Thirty percent of crop producers said they’ve had difficulty buying 2022 crop inputs. In a question posed to corn and soybean producers who have had difficulty procuring inputs, farmers indicated the herbicide supply chain is most problematic, followed by fertilizer and farm machinery parts.