{"id":4908,"date":"2021-02-02T10:30:00","date_gmt":"2021-02-02T14:30:00","guid":{"rendered":"https:\/\/ag.purdue.edu\/commercialag\/ageconomybarometer\/?p=4908"},"modified":"2021-02-02T10:33:02","modified_gmt":"2021-02-02T14:33:02","slug":"media-ag-barometer-drifts-lower-farmers-remain-concerned-about-the-future-despite-strong-economic-conditions","status":"publish","type":"post","link":"https:\/\/ag.purdue.edu\/commercialag\/ageconomybarometer\/media-ag-barometer-drifts-lower-farmers-remain-concerned-about-the-future-despite-strong-economic-conditions\/","title":{"rendered":"Ag Barometer drifts lower, farmers remain concerned about the future despite strong economic conditions"},"content":{"rendered":"\n<p>WEST LAFAYETTE, Ind. and CHICAGO \u2014The <a href=\"https:\/\/ag.purdue.edu\/commercialag\/ageconomybarometer\/\">Purdue University\/CME Group Ag Economy Barometer<\/a> dropped 7 points in January to a reading of 167. While the <em>Index of Current Conditions<\/em> remained relatively flat, down 3 points to a reading of 199; the <em>Index of Future Expectations<\/em> fell 10 points to a reading of 151. Since its peak in October of 2020, the <em>Ag Economy Barometer<\/em> has fallen 9 percent, all attributable to weaker expectations for the future. The <em>Index of Future Expectations<\/em> has fallen 19 percent since October, while the <em>Index of Current Conditions<\/em> rose 12 percent over the same time period. The <em>Ag Economy Barometer<\/em> is calculated each month from 400 U.S. agricultural producers\u2019 responses to a telephone survey. This month\u2019s survey was conducted from January 18-22, 2021.<\/p>\n<div id=\"attachment_4924\" style=\"width: 310px\" class=\"wp-caption alignright\"><img loading=\"lazy\" decoding=\"async\" aria-describedby=\"caption-attachment-4924\" class=\"wp-image-4924 size-medium\" src=\"https:\/\/ag.purdue.edu\/commercialag\/ageconomybarometer\/wp-content\/uploads\/2021\/02\/AgEconomyBarometer_Jan2020-300x217.jpg\" alt=\"Ag Barometer drifts lower, farmers remain concerned about the future despite strong economic conditions. (Purdue\/CME Group Ag Economy&nbsp;Barometer\/James Mintert)\" width=\"300\" height=\"217\" srcset=\"https:\/\/ag.purdue.edu\/commercialag\/ageconomybarometer\/wp-content\/uploads\/2021\/02\/AgEconomyBarometer_Jan2020-300x217.jpg 300w, https:\/\/ag.purdue.edu\/commercialag\/ageconomybarometer\/wp-content\/uploads\/2021\/02\/AgEconomyBarometer_Jan2020-1024x742.jpg 1024w, https:\/\/ag.purdue.edu\/commercialag\/ageconomybarometer\/wp-content\/uploads\/2021\/02\/AgEconomyBarometer_Jan2020-768x557.jpg 768w, https:\/\/ag.purdue.edu\/commercialag\/ageconomybarometer\/wp-content\/uploads\/2021\/02\/AgEconomyBarometer_Jan2020-1536x1113.jpg 1536w, https:\/\/ag.purdue.edu\/commercialag\/ageconomybarometer\/wp-content\/uploads\/2021\/02\/AgEconomyBarometer_Jan2020-2048x1485.jpg 2048w, https:\/\/ag.purdue.edu\/commercialag\/ageconomybarometer\/wp-content\/uploads\/2021\/02\/AgEconomyBarometer_Jan2020-324x235.jpg 324w\" sizes=\"auto, (max-width: 300px) 100vw, 300px\" \/><p id=\"caption-attachment-4924\" class=\"wp-caption-text\"><strong>Ag Barometer drifts lower, farmers remain concerned about the future despite strong economic conditions.<\/strong> (Purdue\/CME Group Ag Economy&nbsp;Barometer\/James Mintert)<\/p><\/div>\n<p>\u201cThe ongoing strength in the <em>Current Conditions Index<\/em> appears to be driven by the ongoing rally in crop prices, while the deterioration in the <em>Futures Expectations Index<\/em> seems to be motivated by longer-run concerns about policies that could impact U.S. agriculture in the future,\u201d said <a href=\"https:\/\/ag.purdue.edu\/commercialag\/ageconomybarometer\/team\/jim-mintert\/\">James Mintert<\/a>, the barometer\u2019s principal investigator and director of Purdue University\u2019s Center for Commercial Agriculture.<\/p>\n<p>Producers are becoming more optimistic about short-term expectations for their farms\u2019 financial performance, with nearly one-third expecting better financial performance in the coming year compared to 2020. When asked about the size of their operating loan, 17% of respondents expect their loan to increase this year and, of those, 20% said the increased loan is due to carrying over unpaid operating debt from the previous year. This implies that 3 to 4% of those surveyed are suffering financial stress; however, that is down from 5-6% of farms identified as suffering financial stress one year ago.<\/p>\n<p>Producers continue to think now is a relatively good time to make large investments in their farming operations. The <em>Farm Capital Investment<\/em> <em>Index<\/em> held strong at its record high of 93 for the past two months. The percentage of farmers expecting to increase their machinery purchases also held at its highest level over the last year of 15 percent in January.<\/p>\n<p>Farmers also remained bullish about short-term farmland values and cash rental rates. In January, 43% of respondents said they expect farmland values to rise over the next year (up 8 points from December) and 27 percent of respondents said they expect cash rental rates to rise in 2021 (up 9 points from last month).<\/p>\n<p>Farmers\u2019 weakening expectations for the future appear to be motivated by concerns about several policy issues. Confidence that the on-going trade dispute with China will ultimately be resolved in a way that favors U.S. agriculture has waned, falling 12 points in January to 38 percent. There is also concern about possible changes in environmental policies with 83% of respondents expecting more restrictive regulations under the new administration (up 42 points since October). Lastly, approximately 73% and 75%, respectively, expect higher estate and income taxes over the next five years, compared to 35% and 40% who felt that way in October.<\/p>\n<p>Interest in capturing carbon on farms that agree to follow specified production practices has increased as several firms have begun offering contracts to farmers. To learn more about this, the January barometer survey included questions related to carbon capture. Thirty percent of respondents to the January survey said they are aware of opportunities to receive a payment for capturing carbon. Interestingly, among the 30 percent aware of these opportunities, 22 percent said they have actively engaged in discussions about receiving a carbon capture payment. This implies that 6 to 7 percent of the farmers in the January survey have given consideration to contractually sequestering carbon.<\/p>\n<p>Finally, to better understand the farming community\u2019s perspective on receiving the COVID-19 vaccine, the barometer survey has been asking respondents since October, whether they plan to get the vaccine. Possible responses included, \u201cYes, as soon as possible;\u201d \u201cYes, but not right away;\u201d and \u201cNo.\u201d Interest in being vaccinated quickly has been trending up since October. In January, 58% said they plan to get vaccinated as soon as possible, up from 39% in December, 36% in November, and 24% in October.<\/p>\n<p>Read the full Ag Economy Barometer report at <a href=\"https:\/\/purdue.ag\/agbarometer\">https:\/\/purdue.ag\/agbarometer<\/a>. The site also offers additional resources \u2013 such as past reports, charts and survey methodology \u2013 and a form to sign up for monthly barometer email updates and webinars.<\/p>\n<p>Each month, the Purdue Center for Commercial Agriculture provides a short video analysis of the barometer results, available at&nbsp;<a href=\"https:\/\/purdue.ag\/barometervideo\">https:\/\/purdue.ag\/barometervideo<\/a>, and for even more information, check out the&nbsp;<em>Purdue Commercial AgCast<\/em>&nbsp;podcast. It includes a detailed breakdown of each month\u2019s barometer, in addition to a discussion of recent agricultural news that impacts farmers. Available now at&nbsp;<a href=\"https:\/\/purdue.ag\/agcast\">https:\/\/purdue.ag\/agcast<\/a>.<\/p>\n<p>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.<\/p>\n<h2>About the Purdue University Center for Commercial Agriculture<\/h2>\n<p>The <a href=\"https:\/\/ag.purdue.edu\/commercialag\/Pages\/default.aspx\">Center for Commercial Agriculture<\/a> was founded in 2011 to provide professional development and educational programs for farmers. Housed within Purdue University\u2019s Department of Agricultural Economics, the center\u2019s faculty and staff develop and execute research and educational programs that address the different needs of managing in today\u2019s business environment.<\/p>\n<p>&nbsp;<\/p>\n<h2>About CME Group<\/h2>\n<p>As the world\u2019s leading and most diverse derivatives marketplace, CME Group (<a href=\"http:\/\/www.cmegroup.com\/\">www.cmegroup.com<\/a>) enables clients to trade futures, options, cash and OTC markets, optimize portfolios, and analyze data \u2013 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&nbsp;<a href=\"http:\/\/www.cmegroup.com\/trading\/interest-rates\/index.html\">interest rates<\/a>,&nbsp;<a href=\"http:\/\/www.cmegroup.com\/trading\/equity-index\/index.html\">equity indexes<\/a>,&nbsp;<a href=\"http:\/\/www.cmegroup.com\/trading\/fx\/\">foreign exchange<\/a>,&nbsp;<a href=\"http:\/\/www.cmegroup.com\/trading\/energy\/\">energy<\/a>,&nbsp;<a href=\"http:\/\/www.cmegroup.com\/trading\/agricultural\/\">agricultural products<\/a>&nbsp;and&nbsp;<a href=\"http:\/\/www.cmegroup.com\/trading\/metals\/\">metals<\/a>.&nbsp; The company offers futures and options on futures trading through the <a href=\"http:\/\/www.cmegroup.com\/globex\/index.html\">CME Globex<\/a>\u00ae platform, fixed income trading via BrokerTec and foreign exchange trading on the EBS platform. In addition, it operates one of the world\u2019s 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.<\/p>\n<p>CME Group, the Globe logo, CME, Chicago Mercantile Exchange, Globex, and E-mini are trademarks of Chicago Mercantile Exchange Inc.&nbsp;CBOT and Chicago Board of Trade are trademarks of Board of Trade of the City of Chicago, Inc.&nbsp;NYMEX, New York Mercantile Exchange and ClearPort are trademarks of New York Mercantile Exchange, Inc.&nbsp;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&amp;P 500, and S&amp;P are service and\/or trademarks of Dow Jones Trademark Holdings LLC, Standard &amp; Poor\u2019s Financial Services LLC and S&amp;P\/Dow Jones Indices LLC, as the case may be, and have been licensed for use by Chicago Mercantile Exchange Inc.&nbsp;All other trademarks are the property of their respective owners.<\/p>\n<p>&nbsp;<\/p>\n<p><strong>Writer:<\/strong> Kami Goodwin, 765-494-6999, <a href=\"mailto:kami@purdue.edu\">kami@purdue.edu<\/a><br><strong>Source:<\/strong> James Mintert, 765-494-7004, <a href=\"mailto:jmintert@purdue.edu\">jmintert@purdue.edu<\/a><\/p>\n<p><strong>Media Contacts:<br><\/strong>Aissa Good, Purdue University, 765-496-3884, <a href=\"mailto:aissa@purdue.edu\">aissa@purdue.edu<\/a><br>Dana Schmidt, CME Group, 312-872-5443,&nbsp;<a href=\"mailto:dana.schmidt@cmegroup.com\">dana.schmidt@cmegroup.com<\/a><\/p>\n<p><strong>Related website:<br><\/strong>Purdue University Center for Commercial Agriculture: <a href=\"http:\/\/purdue.edu\/commercialag\">http:\/\/purdue.edu\/commercialag <\/a><br>CME Group: <a href=\"http:\/\/www.cmegroup.com\/\">http:\/\/www.cmegroup.com\/<\/a><\/p>\n<p><strong>Photo Caption: <\/strong>Ag Barometer drifts lower, farmers remain concerned about the future despite strong economic conditions. (Purdue\/CME Group Ag Economy&nbsp;Barometer\/James Mintert) <a href=\"https:\/\/www.purdue.edu\/uns\/images\/2021\/jan-barometerLO.jpg\">https:\/\/www.purdue.edu\/uns\/images\/2021\/jan-barometerLO.jpg<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>WEST LAFAYETTE, Ind. and CHICAGO \u2014The Purdue University\/CME Group Ag Economy Barometer dropped 7 points in January to a reading of 167. While the Index of Current Conditions remained relatively flat, down 3 points to a reading of 199; the Index of Future Expectations fell 10 points to a reading of 151. Since its peak&hellip;<\/p>\n","protected":false},"author":19,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":"","_links_to":"","_links_to_target":""},"categories":[7],"tags":[],"class_list":["post-4908","post","type-post","status-publish","format-standard","hentry","category-media"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.7 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Ag Barometer drifts lower, farmers remain concerned about the future despite strong economic conditions<\/title>\n<meta name=\"description\" content=\"The Purdue University\/CME Group Ag Economy Barometer rose 27 points to a reading of 183 in October and set an all-time high for the index.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" 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