Purdue/CME Ag Economy Barometer Remains Strong -- Commodity Comment
By Colin Kellaher
The Purdue University/CME Group Ag Economy Barometer was
virtually unchanged in April, up one point from March to a reading
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
Write to Colin Kellaher at firstname.lastname@example.org
(END) Dow Jones Newswires
May 04, 2021 11:12 ET (15:12 GMT)
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