Farmers’ sentiment picks up as income outlook improves, although concerns remain over key policy issues
January 5, 2021
Farmers’ sentiment picks up as income outlook improves, although concerns remain over key policy issues
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Farmers’ sentiment picks up as income outlook improves, although concerns remain over key policy issues. (Purdue/CME Group Ag Economy Barometer/James Mintert) |
WEST LAFAYETTE, Ind. and CHICAGO — Producer sentiment had a modest improvement according to the Purdue University/CME Group Agri-Economic Barometer in December. The barometer is up 7 points from November to 174. Both of the barometer’s sub-indices — the Current Conditions Index and the Future Expectations Index — are also higher in December compared to November. Current Conditions are up 15 points to 202 and the Future Expectations Index is up 5 points to 161.
The agricultural economic barometer is calculated each month from the responses of 400 US agricultural producers to a telephone survey. This month’s survey was conducted from December 7 to 11.
“The rise of the Agricultural Economic Barometer is mainly driven by farmers’ perception that the current situation on their farms is actually improving. The strong increase in the Current Conditions Index correlates with increased farm income as a result of persistently rising agricultural prices. That seems to be the driving force behind the optimism among manufacturers, said James Mintert, principal investigator for the barometer and director of Purdue’s Center for Commercial Agriculture.
It is noteworthy that producers tend to think that now is a better time to invest heavily in their agricultural operations than in November. The Agricultural Capital Investment Index rose 13 points in December up. a record high of 93. The proportion of farmers expecting an increase in machinery purchases next year rose 5 points to 15% in December, while the proportion expecting a decrease in machine purchases fell by the same amount.
Farmers are also optimistic about farmland values and cash rents. In December, the percentage of farmers who expect the value of their farmland to increase next year rose 9 points from November to 35. The percentage of farmers who expect the value of their farmland to increase in five years up 11 points from November to a high in the 65% survey.
Reflecting an improvement in crop production margins, many producers said they expect the share of cash farmland rentals to increase in 2021 when compared with survey results from late summer. In December, 18% of respondents said they expect the cash rental rate to increase in 2021, double the percentage who felt the same in August and September. Moreover, it is clear. It is clear that any downward pressure on cash rents that was apparent at the beginning of the year has almost disappeared, as only 5% of farmers said they expect cash rents to fall in 2021, compared with 17% who felt it. I saw that in August.
Farmers were less optimistic when asked about the ongoing trade dispute between the US and China. In the first quarter of 2020, 76% of respondents believed that the final resolution of the trade dispute would benefit the US agriculture industry. In the spring, that average dropped to 62%, and by December it dropped to an all-time low in the survey of 47%. When asked if they expect U.S. agricultural exports to grow over the next five years, only 51 percent of respondents in December said they expect exports to grow.
To learn more about what factors could drive a shift in producer sentiment before and after the November election, a series of questions focused on producer future expectations for with environmental regulations, taxes and other important aspects of the agricultural economy, were included in the survey for October, November and December. In December, farmers continued to express concerns after the crisis. November elections on several key policy issues affecting agriculture. More than 80% of farmers said they expect environmental regulations to become more restrictive in December, compared with 41% feeling the same way in October. More than 70% of producers expect to see a levy. income and property taxes are higher, compared with 35% and 40% respectively in October. One-third of farmers said they expect the farm income safety net to weaken, compared with the proportion. 18% and just over a quarter of producers said they expect government support for the ethanol industry to weaken, compared with 17% who felt the same way last year. October.
Read the full Agro-Economic Barometric report at https://purdue.ag/agbarometer. The site also offers additional resources — such as past reports, charts, and survey methods — and a form to sign up for monthly barometer email updates and webinars.
Each month, the Purdue Commercial Agriculture Center offers a short video analysis of the barometer results, available at https://purdue.ag/barometervideo and for more information check out the Purdue Commercial AgCast podcast . It includes a detailed breakdown of each month’s barometer, in addition to a discussion of recent agricultural news that impact farmers.
The Agricultural Economic Barometer, Current Conditions Index and Future Expectations Index are available on Bloomberg Terminal under the following ticker symbols: AGECBARO, AGECCURC, and AGECFTEX.
About Purdue University Agricultural Trade Center
The Agricultural Trade Center was established in 2011 to provide education and career development programs to farmers. Housed within the Purdue University Department of Agricultural Economics, the center’s faculty and staff develop and implement research and education programs that address various management needs in today’s business environments. now.
About CME . Group
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Writer: Kami Goodwin, 765-494-6999, kami@purdue.edu
Source: James Mintert, 765-494-7004, jminintert@purdue.edu
Media contact:
Aissa Good, Purdue University, 765-496-3884, aissa@purdue.edu
Dana Schmidt, CME Group, 312-872-5443, dana.schmidt@cmegroup.com
Related websites:
Purdue University Agricultural Center
CME Group
Agricultural communication: (765) 494-8415;
Maureen Manier, Head of Department, mmanier@purdue.edu
Agriculture news site
