Last month, farmer sentiment dropped to its lowest level since April 2020, down 22 points, according to the Purdue University/CME Group Ag Economy Barometer sentiment index.

The rapid rise in production costs and uncertainty regarding the direction of input prices have been important contributors to the drop in sentiment. About 44 percent of farmers, according to the monthly survey, cited input costs as their biggest concern for the coming year.

Nearly six out of ten farmers predict farm input prices to be at least 30 percent higher this year compared to 2021.

The increase in input prices has been substantially larger than the general inflation seen in farm products so far, according to Michael Langemeier, professor at the department of agricultural economics at Purdue University and co-author of the AG Economy Barometer report.

That's why farmers "certainly think that general inflation is going to persist for the next 12 months," Langemeier told The Epoch Times.

On top of this year’s massive price hikes, nearly four out of 10 farmers estimate input prices to rise by 10 percent or more in 2023, according to the survey.

The two most important farming inputs are diesel and fertilizer. Prices of both have risen significantly in the last year and the Russian invasion of Ukraine has further disrupted both markets. Hence, farmers are not expecting price relief anytime soon, according to Langemeier.

U.S. farmers are highly concerned about the possibility of experiencing a price-cost squeeze in the coming years, which refers to the situation in which costs remain high while output prices decrease.

Farmers presently have a strong balance sheet, Langemeier noted, but “they could be facing a price-cost squeeze, particularly in 2023,” he said.