Loading...

Record High Confidence Levels Wane for Agricultural Producers

July 7, 2021 by Brock Blasdell
Record High Confidence Levels Wane for Agricultural Producers
Romaine lettuce grows with the Santa Lucia Mountains in the background in Salinas Valley, Calif., in 2014. (Ed Young/DPA/Zuma Press/TNS)

An Ag Economy Barometer report published Tuesday found a 21-point decline in the confidence of food producers in the United States for June. This solidifies a second month of waning optimism from record highs set earlier in 2021, and indicates food producers are more worried about the future of the agricultural economy than they were just a few months ago. 

“So, you’ve got this concern about costs going up. You’ve got this concern about the difficulty in filling vacancies in your operation. You’ve had some weakness in commodity prices,” James Mintert, professor of Agricultural Economics and director for the Center of Commercial Agriculture at Purdue University, said. “And all of those things combined and coalesced and made people somewhat less optimistic than they were just a month earlier.” 

Rising input costs are one of the most important factors in this decline. Nearly 30% of producers said they expect farm input prices to rise by 8% or more in the upcoming year, a rate four times higher than the average rise over the last decade. This fear has also affected producers’ willingness to invest. A rating which, per the Farm Capital Investment Index, declined 11 points to a reading of 54, the lowest since May 2020.

Moreover, a labor shortage, a problem shared by businesses across the nation, has also played a role in cooling off high confidence levels. In June 2021, just under two-thirds of respondents said they either had “some” or “a lot of difficulty” in hiring labor outside of the immediate family.

“We’ve asked that question two years in a row,” Mintert said. “Last year, only three-out-of-ten people responded that they were having difficulty finding non-family farm labor. This year, two-thirds of the people that responded said they were having some level of difficulty in hiring non-family farm labor.” 

Lower confidence in the future prices of corn and soybean have also played a part. In May, nearly two-thirds of producers expected the rates for corn and soybean leases to rise in 2022. Today, just 47% believe the same. 

“There is a lot of volatility in corn and soybeans. We’re looking at some very tight carry-over supplies from this crop year to the next crop year,” Mintert said. “And it’s being driven pretty heavily by demand, especially in the export channels, and I think there is a lot of uncertainty about how long that export strength might continue. That’s true in corn. That’s true in soybeans. And that’s true in pork.” 

Despite these worries, food producers have remained relatively confident in the value of their land. Both short-term expectations and long-term expectations of land value maintained at their third highest readings since the Ag Economy Barometer started collecting the data in 2015. 

Additionally, some farmers might be looking at leasing land for energy production. According to the report, 32% admit awareness of solar leasing opportunities for their land. Of those, 29% said they had met with companies to talk.

“Not quite 3% of people surveyed had said they had actually signed a solar lease with a company intending to put in solar panels for energy production,” Mintert said. “I think, with respect to how widespread this is and what’s going to take place, it’s very uncertain at this point. But there is a lot of interest in this.”

With food prices remaining relatively inelastic, meaning they don’t change quickly against supply or demand surpluses and shortages, food producers may have to bear the cost of these market difficulties on their own by spending less and finding new revenue sources.

In The News

Health

Voting

Agriculture

Colorado, Nebraska Jostle Over Water Rights Amid Drought

OVID, Colo. (AP) — Shortly after daybreak on the high plains of northeastern Colorado, Don Schneider tinkers with seed-dispensing gear... Read More

OVID, Colo. (AP) — Shortly after daybreak on the high plains of northeastern Colorado, Don Schneider tinkers with seed-dispensing gear on a mammoth corn planter. The day’s task: Carefully sowing hundreds of acres of seed between long rows of last year’s desiccated stalks to ensure the... Read More

May 13, 2022
by Dan McCue
Baby Formula Maker Extends WIC Rebates to Ease Shortage Crisis

WASHINGTON — Abbott Nutrition on Friday committed to continue providing rebates in states with which it holds Special Supplemental Nutrition... Read More

WASHINGTON — Abbott Nutrition on Friday committed to continue providing rebates in states with which it holds Special Supplemental Nutrition Program for Women, Infants, and Children contracts through August 31 in a bid to ease the ongoing baby formula crisis. The decision means that families that... Read More

May 11, 2022
by Kate Michael
Food for Thought: Agro Accounts for a Third of Global Emissions

WASHINGTON — While manufacturing and industry processes are cited as responsible for emitting the most greenhouse gases, food systems also... Read More

WASHINGTON — While manufacturing and industry processes are cited as responsible for emitting the most greenhouse gases, food systems also account for a hefty portion — 31% — of global emissions, and the U.S. and China, as food superpowers, are the two largest contributors. Emissions from... Read More

May 11, 2022
by Reece Nations
Biden Administration Taking Steps to Lower Farming, Food Costs

KANKAKEE, Ill. — President Joe Biden is blaming Russia’s invasion of Ukraine for supply chain disruptions that are causing yield-impairing... Read More

KANKAKEE, Ill. — President Joe Biden is blaming Russia’s invasion of Ukraine for supply chain disruptions that are causing yield-impairing fertilizer shortages and driving up food prices. The war’s repercussions have sent international food prices to record highs, according to United Nations data. The U.N.’s Food... Read More

April 22, 2022
by Tom Ramstack
FBI Warns Farmers to Beware Ransomware Cyberattacks

WASHINGTON — The FBI issued a warning this week to farm cooperatives that ransomware attackers are increasingly trying to disrupt... Read More

WASHINGTON — The FBI issued a warning this week to farm cooperatives that ransomware attackers are increasingly trying to disrupt their operations during the planting and harvest seasons. The FBI announcement was one of several warnings about cyberattacks that are becoming more shrill as Russia continues... Read More

April 4, 2022
by Madeline Hughes
Bipartisan Group Urges USDA to Use Narrower Guidelines to Allocate Broadband Funds

WASHINGTON — More than two dozen members of Congress are urging Secretary of Agriculture Tom Vilsack to ensure the funds... Read More

WASHINGTON — More than two dozen members of Congress are urging Secretary of Agriculture Tom Vilsack to ensure the funds set aside for rural broadband expansion make it to the most rural of areas. The bipartisan letter urging the department to narrow the scope of who... Read More

News From The Well