Farmer optimism took a big hit last month, says the Purdue/CME Group “Ag Economy Barometer” https://ag.purdue.edu/commercialag/ageconomybarometer/. The reason? Crop input costs.
“The dramatic rise in production costs has got everybody upset,” Mintert said during an Agri-Talk radio interview, as reported on AgWeb.com. “The uncertainty it’s creating is really kind of creating havoc in people’s minds, and I think they’re expressing it in their sentiment.”
Despite fairly strong commodity prices at the moment, Mintert says he believes farmers are already concerned about what this year’s harvest and the next two seasons might hold.
“When input costs go up, they tend to be sticky, and the downside is commodity prices can be volatile. Farmers are wondering what commodities will be worth this fall, in the fall of 2023 and even in 2024,” Mintert says. As part of that, he says farmers are likely concerned about what they can expect to pay for diesel, which is hovering around $6 a gallon this week.
Joe Outlaw, co-director of Texas A&M University’s Agricultural and Food Policy Center, told a House Agriculture subcommittee recently that it took input prices four to five years to decline to traditional levels after the drought-induced commodity price spikes of 2012.
Commodity “prices are going to decline, but input prices are going to stay up for a while, and they always do, and that’s going to leave people with what we call the cost-price squeeze,” said Outlaw.Back