WEST LAFAYETTE, Ind. and
CHICAGO, May 4, 2021 /PRNewswire/ -- The Purdue University/CME Group Ag Economy Barometer
was virtually unchanged in April, up one point from March to a
reading of 178. Producers are becoming more optimistic about the
future. The Index of Future Expectations continued its
upward trend from last month, up 5 points to a reading of 169.
However, their views on current conditions slipped. The Index of
Current Conditions dropped 7 points in April, to a reading of
195. 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 April
19-23, 2021.
"The strength in commodity prices continues to drive improving
expectations for strong financial performance, even as many are
seeing rising input costs," said James
Mintert, the barometer's principal investigator and director
of Purdue University's Center for
Commercial Agriculture.
The Farm Financial Performance Index hit a record high in
April, up 13 points from March to a reading of 138, 83 points
higher than one year ago. This month 50% of producers indicated
that they expect better financial performance in 2021 compared to
2020, up from 39% who felt that way in March. Despite expectations
for their farms' strong financial performance, farmers were less
inclined to think now is a good time for large investments in
buildings and equipment than they were in March. However, in a
follow up question, when asked more specifically about their farm
machinery investment plans, more producers in April said they
planned to increase their farm machinery purchases than in March.
Said Mintert, "the divergence between the two responses could be
reflective of the run-up in building costs and difficulty in
scheduling construction projects across the U.S."
Possible changes in U.S. tax policy are on the minds of ag
producers. Ninety-five percent of respondents are either somewhat
or very concerned that changes in tax policy will make it more
difficult to pass their farms on to the next generation.
Eighty-seven percent expect capital gains rates to rise over the
next five years. Three-fourths said they are "very concerned" about
the possible elimination of the step-up in cost basis for farmland
in inherited estates and just over two-thirds (68%) of respondents
said they are "very concerned" about a possible reduction in the
estate tax exemption for inherited estates.
Farmers expect the rise in farmland values to continue unabated
over the next year as the Short-Run Farmland Value Expectations
Index rose to a record high reading of 159, 11 points higher
than a month earlier. Producers were less optimistic, however, when
asked about the 5-year outlook for farmland values as the
Long-Term Farmland Values Expectations Index declined 9
points in April to a reading of 148.
"The difference in producers' short- versus long-term
expectations could be an indication they are concerned that the
rapid rise in farmland values we're seeing may not be sustainable
over the long run," Mintert explained.
With COVID-19 vaccinations widely available across the U.S.,
attention is shifting to the percentage of the U.S. population who
do not plan to get vaccinated. To learn more about commercial ag
producers' vaccination plans and compare that to the U.S.
population at large, the survey has asked producers about their
vaccination plans since October 2020.
The percentage of producers saying "they do not plan to get
vaccinated" declined from a high of 37% in October to 28% in
January and has fluctuated between 28 and 32% since that time.
Polls from Monmouth University
conducted in January, March, and April
2021 indicate 21 to 24% of U.S. adults will "likely never
get the vaccine," while a Pew Research Center poll from February
indicated that 30% of U.S. adults would "probably" or "definitely"
not get a COVID-19 vaccine. Comparing this month's survey results
to these broader population surveys suggests the reluctance to get
vaccinated for COVID-19 among U.S. ag producers mirrors that of the
larger population of all U.S. adults.
Following a nearly one-year hiatus, more in-person ag field
days, workshops, and educational events are being planned for 2021.
On both the March and April barometer surveys, we asked producers
if they are more or less likely to attend these programs than they
were in 2020. Responses were mixed. Just over 70% of respondents
said they are more likely to attend in-person events this year, but
28 to 35% of producers said they are less likely to attend
in-person events. For program planners, this implies a need to
offer programs in a hybrid or virtual format to reach the broad
audience of commercial ag producers.
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
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trademarks of BrokerTec Europe LTD, EBS Group LTD, TriOptima AB,
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Industrial Average, S&P 500, and S&P are service and/or
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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: Ag Economy Barometer remains strong;
producers concerned about possible changes in estate tax policy.
(Purdue/CME Group Ag
Economy Barometer/James
Mintert).
https://www.purdue.edu/uns/images/2021/ag-baramoter-421LO.jpg
CME-G
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SOURCE CME Group