Seven out of 10 farmers expect a U.S. inflation rate below 4 percent this year, a sharp turn in sentiment from the start of 2023, when half of producers expected inflation to exceed 6 percent, said a Purdue University poll released on Tuesday. The most recent Consumer Price Index report pegged inflation at 3.1 percent.
“Producers’ inflation expectations have moderated,” said the Ag Economy Barometer. “In this year’s survey, 13 percent of producers said they expect inflation to be 6 percent or higher with 70 percent of respondents looking for inflation in 2024 to be less than 4 percent.” The 70 percent included 22 percent who said inflation would average 2 percent or less for the year and 46 percent who said inflation would be between 2 and 4 percent.
One third of farmers said they expected interest rates to decline this year, and 22 percent said interest rates would hold steady.
When asked what the farm safety net would look like after the 2024 elections, 22 percent said it would be weaker, 16 percent said it would be stronger, and 61 percent said it would be about the same as now. Congress failed to pass a new farm bill in 2023, and there are doubts whether lawmakers will agree on a bill this year.
The barometer, a monthly gauge of the health of the ag sector, ended the year with a reading of 114, compared to the rolling six-month average of 115.
Purdue interviews operators with production worth at least $500,000 a year for the barometer. USDA data say the top 7.4 percent of U.S. farms top $500,000 in annual sales. The survey has a margin of error of plus or minus 5 percent.
The Ag Economy Barometer is available here.