In its most recent update, Purdue University and CME Group's Ag Economy Barometer rose by 2 points to a reading of 123, primarily due to farmers' improved perception of current conditions. 

The update recorded a modest rise in July’s Farm Capital Investment Index of 3 points to a reading of 45. Since bottoming out at a reading of 31 in November 2022 the index has climbed 14 points and now stands 9 points above its July 2022 level. When asked the primary reason they consider it a bad time to make large investments, the most popular option (for the first time since July 2022) was rising interest rates, selected by 39% of surveyed farmers. Nearly two-thirds (65%) of producers in July said they expect interest rates to increase, up from 57% who felt that way in June. The percentage most concerned about rising farm machinery and new construction prices dropped month-over-month from 37% to 29%.

The percentage of farmers saying now is a good time for large investments has improved to 17% from 10% and the percentage of farmers who feel it’s a bad time to invest declined to 72% vs. 79% who felt that way in November. 

Among farmers who considered it a good time to make large investments, the most popular reason was strong cash flows at 40.3%, followed by investing in new technology at 19.4%. Another 11.9% of farmers said their primary reason was improved farm machinery inventories at dealerships.

Farmers’ top concern for their farming operations in the upcoming year is still higher input costs, chosen by 37% of respondents in this month’s survey. The number two concern for this month’s survey respondents was rising interest rates, chosen by nearly one out of four (24%) producers followed by lower output prices chosen by 19% of farmers in the survey.

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