Ag Economy Barometer Holds Steady

The Purdue University/CME Group Ag Economy Barometer leveled off after two months of sharp declines with the July reading is 134, down only three points from June. Both producers’ sentiment regarding current and future conditions also dropped.

The Index of Current Conditions dropped six points to a reading of 143, primarily due to weaker crop prices. The Index of Future Expectations dropped two points to 130. This month’s sentiment index marked the lowest barometer reading since July of 2020.

Producer sentiment regarding their farms’ financial condition was more optimistic when prices for corn, soybeans, and wheat were surging last fall, winter, and into the early spring. Still, recent sentiment readings suggest farmers remain cautiously optimistic about financial conditions on their farms.

The Farm Financial Performance Index, which asks producers about expectations for their farms’ financial performance this year compared to last year, improved three points to a reading of 99. That’s 43 percent higher than July of 2020.

The Farm Capital Investment Index declined for the fourth consecutive month, dropping four points to a reading of 50 as farmers plan to reduce their farm building and grain bin purchases for the upcoming year.

Over half the producers indicated they expected a rise in the price of inputs by at least four percent during the year ahead.