WEST LAFAYETTE, Ind. and
CHICAGO, April 6, 2021 /PRNewswire/ -- The
Purdue University/CME Group Ag Economy
Barometer rose 12 points in March to a reading of 177, marking 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 a reading of 164 in March. The Index of Current
Conditions tied with its previous all-time high, rising two
points to a reading of 202. The Ag Economy Barometer is
calculated each month from 400 U.S. agricultural producers'
responses to a telephone survey. This month's survey was conducted
from March 22-26, 2021.
"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," said James Mintert, the
barometer's principal investigator and director of Purdue University's Center for Commercial
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."
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 5 points below its all-time high of 93.
Since March 2020, when farmers'
confidence in the agricultural economy plummeted, the investment
index has risen 63%.
Farmers' bullish views on farmland values, both in the coming
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 3-points to a reading of 148, and the
Long-Term Farmland Value Index, matched its previous high
set back in December, up 4-points to a reading of 157. Compared to
the May 2020 low-point, producers'
optimism toward long-term farmland values is up 22 percent.
Producers' perspective on their farms' financial position
continues to improve, which appears to be fueling some of the
short-term optimism about farmland values and capital investments.
The Farm Financial Performance Index is based on responses
to a question 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 time,
the index has seen a remarkable improvement, up 127% to a record
high of 125 in March.
The topic that producers are not optimistic about relates to the
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 that's beneficial to U.S. agriculture
peaked at 81% in early 2020. Since that time, the percentage who
felt that way has been in a free-fall, down just over 50 points to
a reading of 31% in March. This attitude mirrors their thoughts on
whether China will fulfill its
Phase One trade agreement with the U.S. In October, 59 percent of
producers said they expected China
to fulfill its Phase One obligations; that fell to 40% in January,
and to 35% in March.
In a follow-up to questions on previous barometer surveys
regarding carbon sequestration, approximately 30 to 40% of farmers
in our surveys, over the last three months, say they are aware of
opportunities to receive payments for capturing carbon on their
farms. Among the relatively small percentage of respondents who
reported carbon sequestration payment rates that were offered,
approximately 80% of those respondents said payment rates were
$20 or less per acre.
Read the full Ag Economy Barometer report at
https://purdue.ag/agbarometer. The site also offers additional
resources – such as past reports, charts and survey methodology –
and a form to sign up for monthly barometer email updates and
webinars.
Each month, the Purdue Center for Commercial Agriculture
provides a short video analysis of the barometer results, available
at https://purdue.ag/barometervideo, and for even 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 impacts farmers. Available now
at https://purdue.ag/agcast.
The Ag Economy Barometer, Index of Current Conditions and Index
of Future Expectations are available on the Bloomberg Terminal
under the following ticker symbols: AGECBARO, AGECCURC and
AGECFTEX.
About the Purdue University
Center for Commercial Agriculture
The Center for Commercial
Agriculture was founded in 2011 to provide professional development
and educational programs for farmers. Housed within Purdue University's Department of Agricultural
Economics, the center's faculty and staff develop and execute
research and educational programs that address the different needs
of managing in today's business environment.
About CME Group
As the world's leading and most
diverse derivatives marketplace, CME Group (www.cmegroup.com)
enables clients to trade futures, options, cash and OTC markets,
optimize portfolios, and analyze data – empowering market
participants worldwide to efficiently manage risk and capture
opportunities. CME Group exchanges offer the widest range of global
benchmark products across all major asset classes based
on interest rates, equity indexes, foreign
exchange, energy, agricultural
products and metals. The company offers futures and
options on futures trading through the CME Globex® platform, fixed
income trading via BrokerTec and foreign exchange trading on the
EBS platform. In addition, it operates one of the world's leading
central counterparty clearing providers, CME Clearing. With a range
of pre- and post-trade products and services underpinning the
entire lifecycle of a trade, CME Group also offers optimization and
reconciliation services through TriOptima, and trade processing
services through Traiana.
CME Group, the Globe logo, CME, Chicago Mercantile Exchange,
Globex, and E-mini are trademarks of Chicago Mercantile Exchange
Inc. CBOT and Chicago Board
of Trade are trademarks of Board of Trade of the City of Chicago, Inc. NYMEX, New York
Mercantile Exchange and ClearPort are trademarks of New York
Mercantile Exchange, Inc. COMEX is a trademark of Commodity
Exchange, Inc. BrokerTec, EBS, TriOptima, and Traiana are
trademarks of BrokerTec Europe LTD, EBS Group LTD, TriOptima AB,
and Traiana, Inc., respectively. Dow Jones, Dow Jones
Industrial Average, S&P 500, and S&P are service and/or
trademarks of Dow Jones Trademark Holdings LLC, Standard &
Poor's Financial Services LLC and S&P/Dow Jones Indices LLC, as
the case may be, and have been licensed for use by Chicago
Mercantile Exchange Inc. All other trademarks are the property
of their respective owners.
Writer: Kami Goodwin,
765-494-6999, kami@purdue.edu
Source: James Mintert, 765-494-7004,
jmintert@purdue.edu
Related websites:
Purdue University Center for Commercial
Agriculture: http://purdue.edu/commercialag
CME Group: http://www.cmegroup.com/
Photo Caption: Strong commodity prices and improved
financial conditions boost Ag Economy Barometer. (Purdue/CME Group Ag
Economy Barometer/James
Mintert).
https://www.purdue.edu/uns/images/2021/march-barometerLO.jpg
CME-G
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SOURCE CME Group