According to the results of the latest Ag Economy Barometer from Purdue University/CME Group, farmers' investment plans remain hampered by ongoing supply chain issues. This month's reading of the Farm Capital Investment Index weakened slightly to a reading of 45, with the report stating, "The investment index has been range-bound, fluctuating between 39 and 49, since September 2021."
Some 52% of farmers in this month's survey said they plan to reduce their farm machinery purchases in the upcoming year vs. the previous year, up from 48% in the previous month. Only 9% said they plan to increase their farm machinery purchases, and 39% said their farm machinery purchases would be the same year-over-year.
The report stated, "Supply chain issues continue to hamper farmers’ investment plans as, for the third month in a row, over 40% of producers reported that low farm machinery inventories were holding back their purchase plans."
Overall farmer sentiment was lower in January, with the Ag Economy Barometer dropping 6 points to a reading of 119, down from 125 in the previous month. This is the second lowest reading since July 2020. This month's decline in sentiment was driven, "primarily by weaker perceptions regarding the current situation as the Index of Current Conditions fell 13 points from a month earlier to 133," the report stated. "Concerns about rising input costs and ongoing supply chain disruptions contributed to weakness in the current conditions index.
"Future expectations changed little this month, falling just two points from a month earlier to 112. However, future expectations index values have been weak dating back to September as the index ranged from a low of 110 to a high of 116 from September 2021 through January 2022."