The Purdue University/CME Group Ag Economy Barometer rose eight points in April to a reading of 121, said Purdue University Agricultural Economist James Mintert, in a release.
However, the barometer remains 32% below its reading from the same time last year, Mintert said. Producers’ perspective on current conditions and future expectations saw an uptick over the past month.
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 April 18-22.
CONDITIONS, EXPECTATIONS RISE
The Index of Current Conditions rose seven points to a reading of 120 and the Index of Future Expectations rose nine points to a reading of 122, the release said. Rising prices for major commodities, especially corn and soybeans, appeared to be leading the change in producers’ improved financial outlooks.
The Farm Financial Performance Index rose to a reading of 95, up eight points from March and 12 points from January and February, Mintert said. Much of this could be attributed to strengthened commodity prices.
For example, Eastern Corn Belt cash prices for corn in mid-April rose more than 10% above their mid-March level while bids for fall delivery of 2022-crop corn climbed 20% over the same period, he said. Soybean prices rose as well, with near-term delivery prices up about 7% from mid-March to mid-April while elevator bids for fall delivery of new crop soybeans climbed 5% over the one-month span.
COSTS UP SHARPLY
However, it’s hard to overstate the magnitude of the cost increases producers said they were facing, Mintert said. Producers continued to say higher input costs were the top concern for their farming operation.
In April, 42% of producers chose higher input costs as their biggest concern, which was more than twice as many who chose government policies (21%) or lower output prices (19%), the release said. Also, 60% of survey respondents said they expected input prices to rise by 30% over the next 12 months, compared with an average of 37 who said they were expecting a cost increase of this magnitude in the December 2021 through March 2022 surveys.
When asked specifically for their expectations for 2023 crop input prices compared with prices paid for 2022 crop inputs, 36% said they expected prices to rise 10% or more and 21% said input price gains of 20% or more are likely, Mintert said.
The Ukraine war also added a level of uncertainty for producers, the release said. Sixty percent of survey respondents said the biggest effect of the war on US agriculture will be on input prices. Availability would be an ongoing concern.
CATTLE, BEEF RECAP
The USDA reported formula and contract base prices for live FOB steers and heifers this week ranged from $142.65 to $147.00 per cwt, compared with last week’s range of $139.77 to $147.00. FOB dressed steers, and heifers went for $221.36 to $222.53 per cwt, versus $219.04 to $227.96.
The USDA choice cutout Tuesday was down $3.00 per cwt at $259.55, while select was down $0.89 at $247.34. The choice/select spread narrowed to $12.21 from $14.32 with 122 loads of fabricated product and 54 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 unchanged at $1.55 to $1.65 a bushel over the Jul futures and for southwest Kansas were steady at even the Jul, which settled at $7.93 a bushel, down $0.10.
The CME Feeder Cattle Index for the seven days ended Monday was $155.77 per cwt up $0.53. This compares with Tuesday’s May contract settlement of $162.40, up $0.97.