More than half of America’s big farmers expect prices for inputs such as fertilizer and fuel to soar by more than 12 percent in the coming year, a sign of inflation fears felt across the economy, said a poll released by Purdue University on Tuesday. The latest government report pegged inflation at 6.2 percent, the highest in three decades.
“Concerns about rising production costs are contributing to weakness in farmer sentiment,” said Purdue. Its monthly Ag Economy Barometer, a gauge of farmer confidence, fell by 5 points in November, to its lowest reading since May 2020.
In late summer, twice as many farmers expected small price increases, of less than 4 percent, compared to those who expected input prices would rise by more than 12 percent.
“Inflation expectations started to shift in September,” wrote economists James Mintert and Michael Langemeier, who oversee the barometer. In September and October, one in three producers surveyed by Purdue expected inputs to increase in cost by more than 12 percent. The figure shot up to 55 percent in the November survey of 400 large-scale farmers and ranchers, conducted from Nov. 15-19.
“In the November survey, the question was modified to allow producers to choose even higher rates of inflation than on previous surveys. Responding to the modified question, 43 percent of respondents said they expect farm input prices to rise by more than 16 percent in the upcoming year,” said Purdue. “Although much of the attention on increasing input costs has focused on this year’s dramatic rise in fertilizer prices, virtually all other input costs ranging from farm machinery to seed and fuel are on the upswing as well.”
The Ag Economy Barometer is available here.