Purdue University/CME Group Ag Economy Barometer Remains Strong; Producers Concerned About Possible Changes In Estate Tax Policy
The
"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
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
Possible changes in
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
Polls from
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
The Ag Economy Barometer, Index of Current Conditions and Index of Future Expectations are available on the