U.S. Producers' Concerns Over Input Costs Hit Record High

A recent survey conducted by Purdue University and CME Group reveals growing concerns among U.S. producers about rising input costs, which have reached a record high. In September, 52% of respondents cited higher input costs as their top concern, reflecting a significant shift in sentiment. The overall farmer sentiment weakened, with the Ag Economy Barometer dropping from 135 points in August to 123, while the Index of Current Conditions fell by 18 points.

The survey also highlighted a divide between near-term concerns and long-term expectations. Although the Long-Term Farmland Value Expectations Index reached a new high of 168, the Index of Future Expectations declined by 9 points, as more producers anticipated financial difficulties in the coming year. The Farm Financial Performance Index fell from 103 to 90, indicating pessimism about current financial conditions, which coincided with a 6-point drop in the Farm Capital Investment Index to 39.

Additional questions in the survey explored expectations for cash rents, cover crop use, and soybean exports. A majority of producers (73%) expected cash rents to remain the same in 2027, while 46% of respondents currently plant cover crops. Regarding soybean exports, 37% of corn and soybean producers expect U.S. exports to increase over the next five years, but competitiveness remains a concern for many.

For the first time since the question was introduced, fewer than half of respondents (49%) believed the U.S. is headed in the right direction, marking a significant shift in perception. Michael Langemeier, the barometer's principal investigator, noted that producer sentiment reflects a growing divide between concerns about the near term and expectations for the longer term.