According to the Aug. 2 update to the Ag Economy Barometer from Purdue University, 44% of farmers said increases in prices for farm machinery and new construction was their primary reason to consider it a bad time to make large investments in their farm operations.
Only 7% of surveyed farmers said tighter ag equipment inventories from their dealers were keeping them from making large investments, vs. 14% who pointed to rising interest rates and 15% who pointed to uncertainty about their profitability.
The Farm Capital Investment index rose only one point to a reading of 36 vs. the record-low 35 seen in last month's update.
The Ag Economy Barometer rose to a reading of 103 vs. 97 last month, as producers in this month’s survey were somewhat more optimistic about both current and future economic conditions on their farms than they were in June. The Index of Current Conditions rose 10 points in July to 109 while the Index of Future Expectations rose 4 points to 100. Although all three indices rose this month, they were still 23-24% lower than a year earlier.