A dip in October’s Ag Economy Barometer was driven by farmers’ concerns about high input costs and weakening commodity prices.

Farmer sentiment weakened again as the monthly Purdue University/CME Group Ag Economy Barometer dropped 10 points to a reading of 102.

“Concern over rising interest rates grew once again in October and is adding to the unease amongst producers who are worried about its impact on their farm operations,” said James Mintert, the barometer’s principal investigator and director of Purdue University’s Center for Commercial Agriculture. “Additionally, challenging shipping conditions throughout the Mississippi River valley have hampered exports recently and the corresponding widespread weakening of corn and soybean basis levels could be contributing to heightened unease about financial performance.”

The Ag Economy Barometer is calculated each month from 400 U.S. agricultural producers’ responses to a telephone survey.

The Farm Financial Performance Index fell 13 points this month to 86 and was a distillation of farmers’ concerns about high input costs combined with weaker commodity prices. Looking ahead to next year, over 40% of farmers viewed high input costs as their top concern, followed by 21% who chose rising interest rates, 13% who chose lower output prices and 13% who chose input availability.

Interest rates, shipping conditions drive down farmer sentiment

Farm policy discussions are underway as Congress prepares for debate on a new farm bill in 2023.

As a result, several farm policy related questions were included in the October survey. More than one-third (36%) of crop producers chose interest rate policy as the most important policy issue for their farming operation, followed by crop insurance program (27%), environmental policy (16%), conservation policy (11%) and climate policy (10%). When asked how effective the current ARC-County and Price Loss Coverage (PLC) programs are at providing a financial safety net, 72% of respondents rated the two programs as either “somewhat” (61%) or “very effective” (11%). When the same question was posed relative to crop insurance, 84% of respondents rated it as either “somewhat” (56%) or “very effective” (28%).

Interest rates, shipping conditions drive down farmer sentiment

Read the full Ag Economy Barometer report online, purdue.ag/agbarometer.