High input costs remain the major concern for US farmers in the year ahead, but worry is on the rise over weaker commodity prices too.
According to the latest monthly Purdue University-CME Group Ag Economy Barometer – which is based on a survey of 400 producers across the country – 26% of respondents in the December survey cited lower crop and livestock prices as their chief concern for the upcoming year. That is a marked change from January 2023, when concern over lower prices was chosen by just 16% of respondents.
Higher input costs were cited as the biggest concern for 31% of producers surveyed in December, down from 42% in January but still outpacing all other concerns.
The other major concern for the upcoming year was rising interest rates, chosen in December by 24% of survey respondents. Concerning interest rates, about one-third (34%) of respondents said they look for interest rates to decline in the upcoming year, with an additional 22% expecting the prime rate to remain unchanged.
Meanwhile, producers’ inflation expectations have moderated since December 2022. A year ago, 50% of the producers anticipated consumer inflation in the upcoming year to be 6% or higher, with just 13% indicating they expected inflation to be less than 3%. Those results sharply contrast with responses received last month, when just 13% of producers said they expect inflation in the upcoming year to be 6% or higher with 70% of respondents looking for inflation in 2024 to be less than 4%.
Overall, US farmer sentiment changed very little in December compared to the preceding month, down just a single point from November at 114 points.
