Stay Informed

Several adjectives could be used to describe the current farm economy, but surely one of them would be “uncertain.”

“The members I’ve talked to remain very concerned about input prices, inflation and commodity prices,” said Andy Tauer, Indiana Farm Bureau’s executive director of public policy.

Tauer just returned from a trip to Washington, D.C., during which he and a group of INFB members witnessed the release of the U.S. Department of Agriculture’s influential August crop report. Despite extreme heat and sporadic rainfall throughout the Corn Belt, the report predicted record soybean yields and a slight decrease in corn yields.

Meanwhile, producers surveyed for the “ Ag Economy Barometer” released by Purdue and the CME Group in August were somewhat more optimistic about current and future economic conditions on their farms than they were the previous month. However, they are still less optimistic than they were a year ago.

The Ag Economy Barometer is calculated each month from 400 U.S. agricultural producers’ responses to a telephone survey. The barometer’s “sentiment index” rose 6 points between June and July to a reading of 103. Its “current conditions” index rose 10 points to 109 while the “future expectations” index rose 4 points to 100.

Purdue noted, however, that although all three indexes rose this month, they were still 23-24% lower than a year earlier. Farmers surveyed voiced concerns about:

• Higher input prices (42% of respondents).
• Lower crop prices (19% of respondents).
• Rising interest rates (17% of respondents).
• Availability of inputs (15% of respondents).

“Unfortunately, it doesn’t look as though the uncertainty will decrease anytime soon,” Tauer said, citing a study by ag economists at the University of Illinois and the Ohio State University titled “2023 Crop Budgets: Higher Costs and Lower Returns.”

The study said that in 2023, costs are expected to increase from 2022 levels. While 2023 is predicted to be profitable, at projected cost levels, per bushel prices of $5.30 for corn and $12.75 for soybeans would result in “marginal” profitability, similar to levels experienced from 2014 to 2019, the study added.