Home Farm Equipment Optimism abounds in latest ag barometer report

Optimism abounds in latest ag barometer report

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With spring comes renewed optimism from farmers because the Purdue College/CME Group Ag Financial system Barometer rose 12 factors to 177 in March, marking the best studying since October 2020.

Ag Financial system Barometer

The Index of Future Expectations snapped a four-month decline, rising 16 factors to a studying of 164 in March. The Index of Present Situations tied its earlier all-time excessive, rising 2 factors to a studying of 202. The Ag Financial system Barometer is calculated every month from 400 U.S. agricultural producers’ responses to a phone survey. This month’s survey was performed March 22-26.

“Even with a rebound in crop production in 2021, it looks like carryover supplies of corn and soybeans will remain tight, providing producers’ confidence that crop prices will remain strong this year,” mentioned James Mintert, the barometer’s principal investigator and director of Purdue College’s Heart for Business Agriculture. “A rebound in the U.S. economy this summer combined with expectations for a smaller pork supply is also providing some optimism in the livestock sector.”

Capital funding optimism

In March, producers continued to be comparatively optimistic about making farm equipment purchases and capital investments in their farming operations. The Farm Capital Funding Index held at a studying of 88, simply 5 factors beneath its all-time excessive of 93. Since March 2020, when farmers’ confidence in the agricultural economic system plummeted, the funding index has risen 63%.

Ag Financial system BarometerFarm Capital Investment Index

Bullish on land values

Farmers’ bullish views on farmland values, each in the approaching yr and in the subsequent 5 years, continued in March. The Brief-Time period Farmland Worth Expectations Index rose for the fourth month in a row, up 3 factors to a studying of 148, and the Lengthy-Time period Farmland Worth Index matched its earlier excessive set again in December, up 4 factors to a studying of 157. In contrast with the Might 2020 low level, producers’ optimism towards long-term farmland values is up 22%.

Ag Financial system BarometerShortTerm Farmland Value Expectations Index Purdue CME Group

Optimism about farm funds

Producers’ perspective on their farms’ monetary place continues to enhance, which seems to be fueling among the short-term optimism about farmland values and capital investments. The Farm Monetary Efficiency Index is predicated on responses to a query that asks producers, “As of today, do you expect your farm’s financial performance to be better than, worse than, or about the same as last year?” In April 2020, the index hit an all-time low of 55; since that point, the index has seen a exceptional enchancment, up 127% to a report excessive of 125 in March.

What about commerce?

The subject that producers are usually not optimistic about pertains to the on-going commerce negotiations with China. The proportion of producers who anticipate the U.S. commerce dispute with China to be resolved in a approach that’s useful to U.S. agriculture peaked at 81% in early 2020. Since that point, the share who felt that approach has been in a free-fall, down simply over 50 factors to a studying of 31% in March. This perspective mirrors their ideas on whether or not China will fulfill its Part One commerce settlement with the U.S. In October, 59% of producers mentioned they anticipated China to satisfy its Part One obligations; that fell to 40% in January and to 35% in March.

Are farmers cashing in on carbon sequestration?

In a follow-up to questions on earlier barometer surveys relating to carbon sequestration, roughly 30% to 40% of farmers in our surveys, over the past three months, say they’re conscious of alternatives to obtain funds for capturing carbon on their farms. Among the many comparatively small proportion of respondents who reported carbon sequestration cost charges that have been provided, roughly 80% of these respondents mentioned cost charges have been $20 or much less per acre.

Supply: Purdue College Heart for Business Agriculture, CME Group, which is solely answerable for the knowledge supplied and is wholly owned by the supply. Informa Enterprise Media and all its subsidiaries are usually not answerable for any of the content material contained in this data asset. 

 

Try the Ag Financial system Barometer reviews from earlier this yr:

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