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Elevated input prices pushing uncertainty
The lead agricultural economist for McKinsey & Company says farmers are being cautious in the current ag economy.
Wesley Davis says elevated input prices are weighing on farmers.
“A farmer spends about $0.28 per bushel on agri-chems right now.” He says, “From 2000 to about 2020, farmers spent $0.18 per bushel, so you can kind of understand why farmers are hesitant to buy new equipment or buy the new farm next door.”
However, he says there are signs things may be shifting.
“It’s starting to look more bright for the upstream inputs.” He says, “Ag equipment still pretty stressed. Animal proteins still pretty stressed. Upstream, we’re starting to see a little bit of a brighter picture; downstream still a big question mark.”
Davis says surveys show farmers expect to utilize recently approved government payments to help purchase equipment, land, and solidify their operations.
Davis was a presenter on Thursday at the AgriNext Conference in St. Louis, Missouri.
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