The Purdue University-CME Group Ag Economy Barometer plummeted in May to a reading of just 99, the weakest farmer sentiment reading since April 2020. The May 2022 barometer reading marked just the 9th time since data collection began in fall 2015 that the overall measure of farmer sentiment fell below 100. Agricultural producers’ perceptions regarding current conditions on their farms, as well as their future expectations, both weakened this month.
The Index of Current Conditions fell 26 points to a reading of 94, while the Index of Future Expectations declined 21 points to 101 in May. Notably, this month saw a rise in the percentage of respondents who feel their farm is worse off financially now than a year earlier, an indication that escalating production costs are troubling producers. The Purdue University-CME Group Ag Economy Barometer sentiment index is calculated each month from 400 U.S. agricultural producers’ responses to a telephone survey. This month’s survey was conducted from May 16-20, 2022.
Producers exhibited a much more negative view of their farms’ financial situation this month as the Farm Financial Performance Index fell 14 points from April’s reading of 95 to 81 in May. The percentage of producers who expect their farm’s financial performance this year to worsen compared to last year rose from 29% in April to 38% in May. Responses received to the financial performance question this May were nearly the polar opposite of responses received a year earlier. In May 2022, 38% of producers said they expect worse financial performance for their farms compared to a year earlier with just 19% of respondents expecting better financial performance. This stands in contrast to a year earlier when 42 percent of survey respondents expected better financial performance while just 16% said they thought a worse financial performance was likely. Over the course of the last 13 months, the Index of Farm Financial Performance has fallen 41% below its life of survey high of 138 set in April 2021. The decline points to farmers’ lack of confidence in their farms’ financial outlook.