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Farmers say it’s a bad time to make large investments in their operations
Farmers surveyed in the latest Ag Economy Barometer say it’s a bad time to make large investments in their operations.
Jim Mintert, the survey’s principal investigator and director of Purdue’s Center for Commercial Agriculture, says rising interest rates are the primary reason producers have a bearish view.
“This month was the first time more people said that it was a bad time to make large investments because of rising interest rates than increases in prices for farm machinery,” he says.
Thirty-two percent of farmers surveyed said it was a bad time to make a large investment because of high prices for farm machinery and new construction. Thirty-four percent of the respondents selected rising interest rates.
“If you look back to (the survey) last summer, only 14 percent of the people (in the survey) were choosing rising interest rates,” he says. “It’s pretty clear there’s been a big change in the impact of interest rates on people’s thinking and it’s starting to impact their decisions about making investments.”
Mintert says although the Farm Capital Investment Index was down only one point in the latest survey, it’s down 50 percent from its reading two years ago. Ten percent of farmers said it was a bad time for investments because of uncertainty about farm profitability and four percent said it was tight farm machinery inventories at dealers.
Thirty-two percent of farmers surveyed said it was a bad time to make a large investment because of high prices for farm machinery and new construction. Thirty-four percent of the respondents selected rising interest rates.
Audio: Jim Mintert
