The Purdue University/CME Group Ag Economy Barometer rose 12 points in March to 177, the highest reading for the barometer since October 2020. The rise was attributed to producers’ more optimistic view of the future.
The Index of Future Expectations snapped a four-month decline, rising 16 points to 164 in March. The Index of Current Conditions tied with its previous all-time high, rising two points to 202.
Even with a rebound in crop production in 2021, it looks like carryover supplies of corn and soybeans will remain tight and that seems to be providing producers’ confidence that crop prices will remain strong this year, Purdue researchers said. Additionally, expectations for a smaller pork supply combined with a rebound that appears to be on the horizon for the U.S. economy this summer is providing some optimism in the livestock sector.
The Ag Economy Barometer is calculated each month from 400 U.S. agricultural producers’ responses to a telephone survey, which was conducted between March 22 and March 26.
In March, producers continued to be relatively optimistic about making farm machinery purchases and capital investments in their farming operations. The Farm Capital Investment Index held at a reading of 88, just five points below its all-time high of 93.
Since March 2020, when farmers’ confidence in the agricultural economy plummeted as the pandemic was unfolding, the investment index has risen 63%.
Farmers’ bullish views on farmland values, both in the upcoming year and in the next five years, continued in March. The Short-Term Farmland Value Expectations Index rose for the fourth month in a row, up three points to 148, and the Long-Term Farmland Value Index, matched its previous high set back in December, up four points to 157.
Producers are not optimistic about on-going trade negotiations with China. The percentage of producers who expect the U.S. trade dispute with China to be resolved in a way beneficial to the U.S. peaked at 81% in early 2020. Since then, the percentage who feel that way has fallen more than 50 points to a reading of 31% in March.
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