Farmer sentiment weakened in January on worries about rising input costs and continued supply chain disruptions, according to the monthly Purdue University/CME Group Ag Economy Barometer.
The measurement of farm outlook declined 6 points to 119, the second-lowest reading since July 2020. The January rating is three points higher than in November.
The barometer is based on both short-term and longer-range conditions. The decline in January was driven primarily by a drop in the index of current conditions. The index of future conditions only slipped modestly.
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“Rising farm input costs and ongoing supply chain disruptions appear to be contributing to producers’ weaker perception of current conditions,” according to the survey report. “More producers expect the size of their operating loan to increase this year than last year or two years ago with the rise in farm input costs being the most commonly chosen reason for a larger operating loan.”
Some 27% of farmers surveyed expect to take out a larger operating loan this year, which was 10 points higher than a year ago and 12 points higher than January 2020. Nearly 70% of the farmers who expected to borrow more said it was because of an increase in input costs.
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