For the past year, the top concern, by far, of U.S. farmers polled by Purdue University has been higher input costs. Now, it’s a tie between lower commodity prices and higher input costs at 28% each, said the monthly Ag Economy Barometer on Tuesday.
“This alignment suggests that U.S. farmers are concerned about a possible cost/price squeeze leading to lower farm incomes,” said agricultural economists James Mintert and Michael Langemeier, who oversee the barometer. “For the first time, the percentage of producers choosing lower crop/livestock prices [28%] matched the percentage of producers who chose higher inputs costs.”
A year ago, 42% of respondents said higher input costs were their top concern out of the six options in the poll, while 16% chose lower commodity prices. Now, four of 10 producers said they expect crop input prices will be as much as 10% lower than in 2023, and only one third expect to pay more. Meanwhile, analysts commonly say prices for this year’s crops will be lower than last year. Net farm income, a USDA measurement of farm profitability, was forecast to decline this year; income in 2023 was the second-highest on record.
The barometer, a gauge of farmer sentiment, fell to 106 in January, down by 8 points in a month, and below the rolling 12-month average of 115. “Anticipated lower farm income in 2024 significantly influenced the decline,” said Purdue.
Purdue interviews operators with production worth at least $500,000 a year for the barometer. USDA data say the top 7.4% of U.S. farms have $500,000 or more in annual sales. The survey has a margin of error of plus-or-minus 5%.
The Ag Economy Barometer is available here.