2019-12 PAER: Agricultural Outlook for 2020

December 18, 2019

Welcome to our annual outlook issue of the Purdue Ag Econ Report (PAER), where we look back at last year and ahead at economic conditions for agriculture in 2020.

The past year brought a number of challenges for Indiana agriculture, weather being at the top of the list. Rain and flooding impacted the ability to get into fields, and led to difficult decisions about whether to delay planting or take prevented planting insurance. These delays then led to a late harvest. While weather had significant effects in different parts of the state; nationwide, there were only modest improvements in commodity prices .

Looking ahead, there continues to be uncertainty in trade policy and the macroeconomic environment. African Swine Fever in China is having, and will likely continue to have, major impacts in global markets. As a result of this and other factors, global food prices are on the rise, although domestic food price inflation is projected to remain low.

In the following PAER articles, Agricultural Economics Faculty at Purdue provide insight on these and other issues, including land values, rental rates, and agricultural policy.

Jayson Lusk, Distinguished Professor and Head of the Department of Agricultural Economics

Articles in this Publication:

Our Long, Slow, Steady Expansion Should Continue

Trade and trade policy outlook for 2020

2020 Outlook: Farm Policy

Food Price Inflation is on the Rise Globally but Steady at Home

Farmland Market Outlook for 2020

Increase in Indiana cash rent seems unlikely in 2020

More milk, consolidation continues, but still an improved 2020 price outlook

2020 Purdue Crop Cost & Return Guide

2020 Corn Price Outlook

2020 Soybean Price Outlook

Latest Articles:

Indiana Farmland Prices Grow at Record Pace in 2022

August 10, 2022

Indiana farmland prices grew at a record pace between June 2021 and June 2022, according to the recent Indiana Farmland Value and Cash Rent Survey. Statewide, the average per acre price for top quality farmland increased by 30.9% to $12,808; average quality farmland increased by 30.1% to $10,598; poor quality farmland prices increased 34.0% to $8,631. Across all quality grades, farmland prices exceeded the previous highs set in 2021.

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Trends in Farmland Price to Rent Ratios in Indiana

August 10, 2022

A standard measure of financial performance most commonly used for stocks is the price to earnings ratio (P/E). A high P/E ratio sometimes indicates that investors think an investment has good growth opportunities, relatively safe earnings, a low capitalization rate, or a combination of these factors. However, a high P/E ratio may also indicate that an investment is less attractive because the price has already been bid up to reflect these positive attributes. This paper computes a ratio equivalent to P/E ratio for farmland, the farmland price to cash rent ratio (P/rent), and discusses trends in the P/rent ratio.

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Farmer optimism about short-term US farmland values weakens

August 10, 2022

Farmers purchase the majority of US farmland. The 2017 USDA Census of Agriculture reports more than 60% of farmland is owned by farmers. Farmers’ farmland value expectations are an important driver of farmland prices.

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The Purdue Agricultural Economics Report is a quarterly publication written by faculty and staff from the Department Agricultural Economics at Purdue University.

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