Farmers reacted positively to the fall harvest as reflected in Dec. 5-9 survey results of the Purdue University-CME Group Ag Economy Barometer Index.
Sentiment improved 24 points from November to a reading of 126 and the Current Conditions Index rose 37 points to 135.
However, Jim Mintert, director of the Center for Commercial Agriculture at Purdue, said the overall sentiment was 7% lower than December 2021. The jump from November partly comes from decreased expectations earlier in 2022. The Farm Financial Performance Index reached 109, 18 points greater than November's reading, but that was the first time in 2022 that the index rose above 100 points.
On Dec. 1, the USDA issued highlights from its “Farm Sector Incomes & Highlights” report, which forecasted $160.5 billion in profits for the 2022 year, which was an increase of $19.5 billion from 2021. Adjusted for inflation, farm income is expected to increase 7.2% from 2021 and reach its highest level since 1973.
“Net farm income in 2022 would be 53.3% above its 20-year average (2002–2021) of $104.7 billion in inflation-adjusted dollars,” the report said.
Farmers expect to do better than 2021, jumping from 23% to 35% of the 400 U.S. agricultural producers who responded to the Ag barometer phone survey.
The Farm Capital Investment Index rose nine points to 40, which was the highest reading since February, but it was still nine points lower than last year. Most respondents replied that it was still a bad time to buy farm machinery or build, with interest rates becoming more influential on that sentiment.
Farmers also are concerned about the value of their farmland, with the short-term index falling five points to 124 and the long-term index falling to 140 from 144.
Farmers' biggest concerns for 2023 were higher input costs and rising interest rates. They expect their farms won't do as well in 2023.
In 2021, according to the USDA, there were 55,100 farms in Indiana with a total of 14.8 million acres. Corn was the No. 1 commodity, at more than $5 billion. Soybeans came in second at almost $4 billion, with pork, dairy and turkeys rounding out the top five.
At the close of the year, grain prices were mostly higher, according to Successful Farming.