By Colin Kellaher

 

The Purdue University/CME Group Ag Economy Barometer was virtually unchanged in April, up one point from March to a reading of 178.

The survey found that producers are becoming more optimistic about the future, with the index of future expectations up five points to a reading of 169. However, the index of current conditions slipped seven points in April to a reading of 195.

"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 barometer is calculated each month from 400 U.S. agricultural producers' responses to a telephone survey.

 

Findings from the survey:

The farm financial performance index hit a record high of 138 in April, up 13 points from March and 83 points higher than a year ago. This month 50% of producers indicated that they expect better financial performance in 2021 compared with 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.

Possible changes in U.S. tax policy are on the minds of ag producers, with 95% of respondents either somewhat or very concerned that changes in tax policy will make it more difficult to pass their farms on to the next generation.

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 reading of 159 in April, up 11 points from March. Producers were less optimistic about the five-year outlook for farmland values, with the long-term farmland values expectations index down nine points in April to a reading of 148.

 

Write to Colin Kellaher at colin.kellaher@wsj.com

 

(END) Dow Jones Newswires

May 04, 2021 11:12 ET (15:12 GMT)

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