U.S. farmers’ sentiment changed very little in December compared to the preceding month. The December 2023 update to the Purdue University-CME Group Ag Economy Barometer recorded a reading of 114, just one point lower than a month earlier. Both sub-indices of the barometer, the Index of Current Conditions and the Index of Future Expectations, also fell one point below their respective November readings. The Current Conditions Index for December was 112, while the Future Expectations Index was 115. All three indices were weaker than in December 2022, with the Ag Economy Barometer falling 10% below a year earlier. Additionally, the current and future indices were 17% and 6%, respectively, below last year.
The Farm Capital Investment Index was virtually unchanged in December, holding at a reading of 43, just one point above the previous month. Respondents who said that now is a good time to make large investments in their farm operation pointed to “higher dealer inventories” and “strong cash flows” as key factors to support this perspective.
High input costs continue to be the primary source of concern for U.S. farmers. However, over the course of the year, there was a marked shift regarding producers’ apprehensions. In January, only 16% of farmers in the barometer survey pointed to the risk of “lower crop and/or livestock prices” as one of their biggest concerns. This changed as 2023 unfolded, and by December, just over one-fourth of respondents (26%) said the risk of lower prices for crops and livestock was a big concern.