The 2022 Season View from the Farmgate: Happy with High Commodity Prices, Worried About High Input Prices
May 4, 2022 Overall, it sounds as if U.S. growers are taking a page from the classic “A Tale of Two Cities” in their views on the 2022 growing season: It is the best times, it is the worst of times.
In its mid-April survey of 400 U.S. agricultural producers, Purdue University and CME Group found that the Ag Economy Barometer for the year has improved by eight points from the March survey to a reading of 121. Furthermore, the Index of Current Conditions has improved seven points to 120 while the Index of Future Expectations has improved nine points to 122.
In the survey summary, James Mintert, the barometer’s Principal Investigator and Director of Purdue University’s Center for Commercial Agriculture, cited improving commodity prices for this uptick. “Rising prices for major commodities, especially corn and soybeans, appears to be leading the change in producers’ improved financial outlook,” said Mintert. He added that the Farm Financial Performance Index has improved to a reading of 95, up eight points from March and 12 points from January and February.
For example, said the report, Eastern Corn Belt cash prices for corn in mid-April rose more than 10% above mid-March levels, with bids for fall delivery rising more than 20%. In addition, soybean prices are also up, 7% higher between mid-March and mid-April, while elevator bids for fall delivery here up 5% during the same one-month span.
On the “worst of times” side, Mintert pointed to higher costs as the major drag on U.S. grower confidence right now. “It’s hard to overstate the magnitude of the cost increases producers say they are facing,” he said.
Loading ...For example, in the mid-April survey, 42% of producers cited higher input costs as their biggest concern for 2022. This was double the number of respondents who chose government policies (21%) and lower output prices (19%). Furthermore, the mid-April survey found that 60% of respondents expect input prices to increase by 30% over the next 12 months. This compares with 37% that said they anticipated the same thing during previous surveys conducted between December 2021 and March 2022.
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