March 1, 2022
Farmer sentiment continues to fluctuate month-to-month. The Ag Economy Barometer rose 6 points to a reading of 125 in February, a mirror image of the December reading.
The Farm Financial Performance Index remained unchanged in February at a reading of 83. However, the sharp drop in the index, down 27% from late 2021 to 2022, indicates producers expect financial performance in 2022 to be worse than in 2021.
“These survey responses suggest that concerns about the spike in production costs and supply chain issues continue to mostly outweigh the impact of the commodity price rally that’s been underway this winter,” said James Mintert, the barometer’s principal investigator and director of Purdue University’s Center for Commercial Agriculture.
Tight machinery inventories continue to be a problem, and The Farm Capital Investment Index drifted lower in February.
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. Over 40% of producers in this month’s survey said that low farm machinery inventories are holding back their investment plans. Plans for farm building and grain bin construction were more optimistic in February than in January, although 56% of producers this month still said their new construction plans for the upcoming year are below a year ago.
Crop input challenges
Higher input costs have consistently been the number one concern identified by farmers over the past six months.
Thirty percent of corn and soybean producers say they’ve had difficulty purchasing crop inputs from their suppliers. In a follow-up question posed to corn and soybean producers who said they experienced difficulty procuring inputs, herbicides are the most problematic input to source followed by fertilizer and farm machinery parts.
Corn producers were again asked if they plan to change their nitrogen fertilizer application rate in 2022 compared to the rate used in 2021. One-third of corn producers in this month’s survey said they plan to use a lower nitrogen application rate this year than in 2021, compared with 37% of corn producers who said they planned to reduce their nitrogen application rate when surveyed in January.
The need for better broadband coverage in rural areas has been highlighted in several legislative proposals at both the state and national level. The February barometer survey included a question asking respondents to characterize the quality of their farm’s internet access.
Just three of 10 respondents said they had “high-quality” internet access, 41% said “moderate quality,” 16% chose “poor quality” on the survey, and 12% stated that they did not have internet access at all. Responses to this question suggest that nearly three of 10 farms in this month’s survey are unable to take advantage of many applications and services which require reasonable quality internet access.
The Ag Economy Barometer is calculated each month from 400 U.S. agricultural producers’ responses to a telephone survey. This month’s survey was conducted Feb. 14-18, days before Russia’s invasion of Ukraine. View the full report.
Source: Purdue University and CME Group, which are solely responsible for the information provided and is wholly owned by the source. Informa Business Media and all its subsidiaries are not responsible for any of the content contained in this information asset.
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