Farm News & Views - June 14, 2022
The Gardner Food and Agricultural Policy Survey, is a collaboration between the Department of Agriculture and Consumer Economics, at the University of Illinois and Purdue University Department of Agricultural Economics. The quarterly survey asks approximately 1,000 US consumers questions about their opinions concerning how food and agricultural issues affect them. The recent 1st quarter survey indicated that most of the respondents believe that our food is safe, healthy, affordable and available. In response to a question about who they trusted most in the food system, respondents picked farmers first, grocery stores second, restaurants third, food manufacturers, and last, the government. However, consumers are worried about how climate change will affect the food supply by increasing the cost of food, how it might impact farmers and land available for food production and the possibility that climate change may cause food shortages.
Inflation is hitting consumers, with rapidly rising grocery prices that are up almost 12% in the past year, which is faster than the overall U.S. inflation rate of 8.6%, according to the government Consumer Price Index report. Food is the largest consumer expense after housing, amounting to 13.4 cents of the consumer dollar, and economists point out that food bills are an informal and frequent test of Americans’ sense of economic well-being.
Although ag commodity prices are at near record levels, the responses of farmers and residents of small rural communities to a couple of recent surveys indicate that there’s more than a little concern about where the ag economy is headed. The May Creighton University Rural Mainstreet Index for Colorado fell from March’s 86.6 to 76 in April, while the farm and ranch land-price index rose to 81.5 that’s up 5.3 points since March. U.S. Bureau of Labor Statistics data indicate that over the last 12 months, Colorado’s Rural Mainstreet has experienced a strong 6.6% gain in nonfarm employment compared to a lower 5.3% for urban areas of the state. The survey looks at the economy of communities with average populations of about 1,300 residents. Nationally, farmer optimism took a hit in May, according to the recently released Ag Economy Barometer from Purdue University and CME group. Farmer sentiment, an indicator of how secure farmers feel about the future of their operations and the direction that the ag economy is headed, plummeted to a reading of 99, the weakest farmer sentiment reading since April 2020. This report marks only the ninth time since 2015 that the measure of farmer sentiment has fallen below 100 points, according to Jim Mintert, director, Center for Commercial Agriculture, Purdue University. Mintert believes that the dramatic rise in production expenses concerns many farmers, and that’s the reason that farmer sentiment tumbled from April to May.
While these surveys indicate that many farmers are concerned that the ag economy is in trouble, some farmers and investors are obviously bullish on farmland. According to Randy Dickhut, senior vice president for Farmers National Company, prices for good quality cropland are up 20% in some areas since the beginning of the year. "Good land that was selling for around $16,000 last fall sold for $19,000 to $21,500 per acre at company auctions in March,” Dickhut said.
Albert Einstiein said, “I never think about the future; it comes soon enough.