The monthly Purdue University/CME Group Ag Economy Barometer dipped to a reading of 113 in March, down 12 points from February and 36% lower than March 2021, marking the weakest farmer sentiment reading since May 2020, in the early days of the pandemic, said Purdue University Agricultural Economist James Mintert, in a release.
The Ag Economy Barometer is calculated each month from 400 US agricultural producers’ responses to a telephone survey. This month’s survey was conducted between March 14-18.
The decline in sentiment was driven by producers’ weaker perceptions of current conditions in the agricultural economy and expectations for the future, Mintert said.
CURRENT, FUTURE CONDITIONS SEEN LOWER
The Index of Current Conditions declined 19 points to 113, down 44% from March 2021, and the Index of Future Expectations declined nine points to 113, down 31% from the same time last year, the release said.
Concerns about the Ukraine war’s effect on input prices and input availability on their farming operations was paramount in the minds of producers responding to the March survey and was a major factor in this month’s decline in sentiment, the survey found.
The March survey provided the first opportunity to ask producers exactly how they expected the war in Ukraine to affect US agriculture, Mintert said. Producers overwhelmingly said they expected input prices to be affected the most (63% of respondents), followed by crop prices (33% of respondents) and livestock prices (3% of respondents).
INPUTS SCARCE
Responding to a related question, 19% of respondents chose “availability of inputs” as their biggest concern in their farming operation this year, equal to the percentage of producers who chose “lower crop and/or livestock prices” as their biggest concern.
Fifty-seven percent expected farm input prices to rise by 20% or more and 36% thought input prices would rise by 30% or more, he said. And, 27% said they had had difficulty purchasing inputs for the 2022 crop season.
Producers reported that supply chain problems persisted across a wide range of inputs with herbicides, fertilizer and farm machinery parts posing the most problems, the release said.
It was clear that farmers did not expect commodity price strength to offset the dramatic rise in production costs they are experiencing, Mintert said. Producers said they expected their farm’s financial performance to decline this year.
Producers did not view this as a good time to make large investments in their farming operations as the Farm Capital Investment Index fell again, the release said. The index was six points lower than in February and 59% lower than last year when it was near its all-time peak
CATTLE, BEEF RECAP
The USDA reported formula and contract base prices for live FOB steers and heifers this week ranged from $138.00 to $141.00 per cwt, compared with last week’s range of $138.00 to $140.00. FOB dressed steers, and heifers went for $217.28 to $218.42 per cwt, versus $216.58 to $221.36.
The USDA choice cutout Tuesday was up $3.49 per cwt at $271.53, while select was up $1.20 at $262.90. The choice/select spread widened to $8.63 from $6.34 with 94 loads of fabricated product and 29 loads of trimmings and grinds sold into the spot market.
The USDA reported that basis bids for corn from feeders in the Southern Plains were steady at $1.40 to $1.55 a bushel over the May futures and for southwest Kansas were unchanged at $0.10 over May, which settled at $7.59 3/4 a bushel, up $0.09 1/4.
No live cattle contracts were tendered for delivery Tuesday.
The CME Feeder Cattle Index for the seven days ended Friday was $155.76 per cwt down $0.39. This compares with Tuesday’s Apr contract settlement $156.12, down $2.25.