Rising prices for corn and soybeans provided some boost among farmers about current economic conditions but higher operating costs are a growing concern.
This is according to the latest Purdue University/CME Group Ag Economy Barometer for April, which rose 8 points to a reading of 121 for the month but is 32% lower when compared to the same month a year earlier.
Producers' perspective on current conditions and future expectations saw an uptick the past month, Purdue researchers said. The Index of Current Conditions improved 7 points to 120 and the Index of Future Expectations improved 9 points to 122.
Rising prices for major commodities, especially corn and soybeans, appear to be leading the change in producers' improved financial outlook, researchers said. The Ag Economy Barometer is calculated each month from 400 U.S. agricultural producers' responses to a telephone survey, which was conducted between April 18 and April 22.
The Farm Financial Performance Index improved to 95, up 8 points from March and 12 points higher than in January and February. Much of this could be attributed to the strengthened commodity prices, researchers said.
Researchers said cost increases are a top concern for producers. Even as commodity prices have strengthened, producers continue to say higher input costs for farming operations is a growing problem.
In April, 42% of producers chose higher input costs as their biggest concern, which was more than twice as many who chose government policies (21%) or lower output prices (19%).
About 60% of April survey respondents said they expect input prices to rise by 30% over the next 12 months. This compares to an average of 37% of respondents who said they were expecting a cost increase when the same question was posed in the December 2021 through March 2022 surveys.
When asked specifically for their expectations for 2023 crop input prices compared to prices paid for 2022 crop inputs, 36% of respondents said they expect prices to rise 10% or more and 21% of crop producers said input price hikes of 20% or more are likely.
The war in Ukraine has also added a new level of uncertainty for producers, researchers said. About 60% of survey respondents said the biggest impact of the war on U.S. agriculture will be on input prices.
The complete Ag Economy Barometer is available on Purdue University’s website dedicated to the report.