Farmers say now is not the time to make large investments in operations
Many farmers are saying now is not a good time to make large investments in their operations.
Ag Economist Jim Mintert tells Brownfield the latest Purdue University/CME Group Ag Economy Barometer is pointing to supply chain issues.
“Over 40 percent of the people in the survey have been telling us tight farm machinery inventories are impacting their investment decisions,” he says. “That’s one factor and I think that’s spilling over into farm construction as well.”
The survey shows that the Farm Capital Investment Index was unchanged in April despite an improved financial performance outlook. The index had an all-time low reading of 36, one point below the previous low reading seen in May 2019.
He says farmers were asked if it’s a good or bad time to make large investments.
“In the current environment, when you ask people that question, they’re having trouble saying it’s a good time because even if they are in the market to make an investment, they might not feel like it’s a good time because availably is tough, prices are high, prices are substantially higher than a couple of years ago, and in many cases they’re probably paying list price or above list price.”
The monthly national survey of 400 U.S. agricultural producers was conducted from April 18-22.
Audio: Jim Mintert