Purdue Agricultural Economics Report

The Purdue Agricultural Economics Report (PAER) exists to serve and further the core mission of the department to engage with real world problems that are of value to stakeholders. The scholarship communicated in this publication will represent the department’s excellence in creative endeavor for new knowledge and its dissemination in the economics of agriculture and natural resources.

Recent Publication:

2025-01 PAER: Outlook 2025

January 31, 2025

Welcome to the PAER Outlook 2025 issue! Continuing our tradition, this year’s issue offers insights from Purdue Agricultural Economics specialists on key topics shaping agriculture, rural development and the broader economy. With a focus on the implications of the 2024 election, our contributors examine emerging policy shifts and their potential impacts on trade, farm incomes, food prices and rural health.

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The Outlook for the U.S. Economy in 2025

Publication Date: January 2025

Article ID: PAER-2025-01

Author: Larry DeBoer, Extension Specialist and Professor Emeritus

Summary: Amid much policy uncertainty, output will likely grow about 2.2% in 2025, a bit slower than in 2024. Inflation should fall gradually to 2.4%, the unemployment rate should remain unchanged, and the Fed will cut interest rates more slowly than previously expected.

Interesting Times for U.S. Trade Policy

Publication Date: January 2025

Article ID: PAER-2025-02

Author: Russell Hillberry, Professor of Agricultural Economics

Summary: The President-elect’s trade policy is likely to be at least as harmful in his second term in office as it was in his first term. Export-oriented agriculture will bear a disproportionate share of the costs from another trade war.

Farm Policy Outlook

Publication Date: January 2025

Article ID: PAER-2025-03

Authors: Dewey J. Robertson, Graduate Research Assistant; Roman Keeney, Associate Professor of Agricultural Economics

Summary: In this outlook we examine the agricultural policy implications of a new Trump administration, focusing on the potential passing of a 2025 farm bill and its impact on the sector. We consider how the farm safety net will address new policy agendas such as federal budget priorities and broader economic issues such as trade, immigration, and energy.

Publication Date: January 2025

Article ID: PAER-2025-04

Authors: Caitlinn Hubbell, Market Research Analyst; Joe Balagtas, Professor of Agricultural Economics

Summary: Hubbell and Balagtas take a look back at the big food price stories over the past year. They also look ahead at what’s in store for 2025, and discuss how food prices may be affected by policy changes and weather events in the year to come.

Health Outcomes: How does Indiana compare to the rest of the country?

Publication Date: January 2025

Article ID: PAER-2025-05

Author: Laura Montenovo, Assistant Professor of Agricultural Economics

Summary: Indiana's health outcomes largely align with U.S. averages, but notable differences exist, including a lower life expectancy by nearly two years and a lower uninsured rate. Unlike national trends, Indiana counties do not show a strong inverse relationship between uninsurance rates and life expectancy.

2025 Agricultural Credit Outlook

Publication Date: January 2025

Article ID: PAER-2025-06

Authors: Joshua Strine, PhD Student; Todd Kuethe, Professor of Agricultural Economics and Schrader Chair in Farmland Economics

Summary: Despite lower interest rates, agricultural credit market conditions weakened in 2024, with rising loan demand, declining repayment rates, and reduced fund availability signaling challenges for 2025. While short-term loan rates may continue to decline, farmers face tighter operating margins and financial strain heading into the new year.

2025 Purdue Crop Cost and Return Guide

Publication Date: January 2025

Article ID: PAER-2025-07

Author: Michael Langemeier, Professor of Agricultural Economics

Summary: Production costs and breakeven prices in 2025 are expected to be similar to those experienced in 2024. However, production costs are still considerably higher than what they were prior to the advent of COVID-19.

2025 Farmland and Cash Rent Outlook

Publication Date: January 2025

Article ID: PAER-2025-08

Author: Todd Kuethe, Professor of Agricultural Economics and Schrader Chair in Farmland Economics

Summary: Indiana farmland values reached record highs in 2024 but showed slight declines, with further softening expected due to lower farm incomes, reduced crop prices, and high interest rates. Cash rental rates are also under pressure as tighter margins leave farmers with less capital for land expenses in 2025.

“What to Watch” in Dairy Markets in 2025

Publication Date: January 2025

Article ID: PAER-2025-09

Author: Nicole Olynk Widmar, Professor & Interim Department Head in Agricultural Economics

Summary: Strong domestic demand is expected to support relatively stable prices in dairy markets, but a variety of factors – both domestic and international – should be watched in 2025.

Analysis of Labor Market Outcomes during the COVID-19 Pandemic in Eight Countries

Publication Date: January 2025

Article ID: PAER-2025-10

Author: Laura Montenovo, Assistant Professor of Agricultural Economics

Summary: Pre-pandemic job characteristics and social distancing policies significantly influenced employment changes across eight countries during COVID-19, with employer behavior (labor demand) driving job losses more than worker decisions (labor supply).

Does a higher standard deduction decrease cash donations and volunteering?

Publication Date: October 2024

Article ID: PAER-2024-26

Author: Laura Montenovo, Assistant Professor in the Department of Agricultural Economics

Summary: Tax policy shapes individuals’ incentives to give to charities. In fact, taxpayers can deduct charitable cash contributions as an itemized deduction, which decreases their taxable income and leads to a lower tax bill. Itemizing deductions, however, is not convenient for all taxpayers. Moreover, the standard deduction is the better option for those whose total itemized deductions for eligible expenses are lower than the current standard deduction. Taxpayers choose between the standard deduction and itemized deductions based on which yields the lower amount of taxable income and, hence, tax liability.

Farmland Prices Increase Despite Downward Pressure

Publication Date: August 2024

Article ID: PAER-2024-22

Todd Kuethe, Professor, Schrader Endowed Chair in Farmland Economics

Summary: Indiana farmland prices reached record highs in 2024, with top-quality land averaging $14,392 per acre, a 4.8% increase from 2023, according to the Purdue Farmland Value and Cash Rent Survey. Regional variations and market forces like high interest rates and low land supply influenced the market, while long-term projections suggest continued modest growth. Transition land saw a significant 21.6% rise, while recreational land values dipped slightly.

Trends in Farmland Price to Rent Ratios in Indiana, 2024

Publication Date: August 2024

Article ID: PAER-2024-23

Michael Langemeier, Professor of Agricultural Economics

Summary: Farmland prices in west central Indiana increased slightly in 2024 (0.2%) and are 19.7% above the previous peak in 2014. Compared to the farmland price in 2007, current farmland prices in west central Indiana are 187% higher. Farmland prices are influenced by many factors, including net income, growth in earnings, crop and livestock prices, interest rates, alternative investment returns, inflation, liquidity, agricultural policy, and energy policy. Cash rent, which is influenced by net return to land, along with interest rates, is often referred to as a fundamental factor impacting farmland prices.

Farmland Conversion in Indiana

Publication Date: August 2024

Article ID: PAER-2024-24

Todd Kuethe, Professor, Schrader Endowed Chair in Farmland Economics; and Megan Hughes, Graduate Research Assistant

Summary: Farmland conversion is a key factor influencing Indiana's farmland market in 2024, with large public and private projects driving up land prices. This article explores the impact of land transitioning out of agriculture on market values, comparing current trends to historical data. Discover how the demand for development, coupled with economic forces like interest rates and crop prices, is shaping the future of Indiana's farmland and its availability for agricultural production.

Research Spotlight: The Impact of Solar Energy on Indiana Farmland Prices

Publication Date: August 2024

Article ID: PAER-2024-25

Binayak Kunwar, Graduate Research Assistant

Summary: As solar energy production grows, farmers' interest in leasing land for solar projects is rising, potentially driving up farmland values. This research thesis summarizes a hedonic price model analysis that reveals a positive price premium for farmland near solar generation facilities, with the strongest effects seen in high-value land. Understanding these dynamics is crucial for landowners, farmers, and policymakers as solar energy expands across the state.

Indiana Labor Market Trends Pre- and Post-COVID-19

Publication Date: July 2024

Article ID: PAER-2024-21

Laura Montenovo, Assistant Professor in the Department of Agricultural Economics

Summary: This report examines the evolution of Indiana’s labor market from 2014 to 2023, highlighting the significant impact of the COVID-19 pandemic in 2020, a swift recovery and growth in labor demand post-2021, and a return to pre-pandemic trends starting in 2023. Key indicators such as unemployment rates, employment levels, employment churn, and earnings are analyzed to understand these trends.

State of the Agricultural Economics Graduate Program in 2024

Publication Date: May 2024

Article ID: PAER-2024-12

Carson Reeling, Interim Graduate Program Chair of Agricultural Economics; Brady Brewer, MS-MBA Director and Associate Professor of Agricultural Economics

Summary: Dr. Carson Reeling and Dr. Brady Brewer provide an update on the State of the Agricultural Economics Graduate Program at Purdue University.

Trends and Changes in Agricultural Job Opening Salaries

Publication Date: May 2024

Article ID: PAER-2024-13

Joshua Strine, Doctoral Student

Summary: Using job openings that are available on the Google Jobs job board, changes and long-term trends in salary of agricultural job openings is analyzed. It is found that salaries increased year over year from 2022 to 2023 and are elevated in the summer month.

Income Differences: Owner's and Businesses' Age Amongst Family/Non-Family Businesses

Publication Date: May 2024

Article ID: PAER-2024-14

William Walls, Graduate Research Assistant; Renee Wiatt, Family Business Management Specialist; and Dr. Maria Marshall, James and Lois Ackerman Professor of Agricultural Economics

Summary: Utilizing average income for small businesses, this report sought to understand the impact succession practices can have on the success and longevity of small businesses. *As modified from the Purdue Institute for Family Businesses 2023 Quarter 1 Newsletter*

Producer Sentiment and Resilience at the Purdue Top Farmer Conference

Publication Date: May 2024

Article ID: PAER-2024-15

Margaret Lippsmeyer, Graduate Research Assistant; Michael Langemeier, Associate Director of Center for Commercial Agriculture and Professor of Agricultural Economics; James Mintert, Director of Center for Commercial Agriculture and Professor of Agricultural Economics; and Nathan Thompson, Associate Professor of Agricultural Economics

Summary: Each year in early January, Purdue University hosts the Purdue Top Farmer Conference, where academic speakers, agribusiness affiliates, and farmers convene to discuss current issues and trends in agricultural markets. At this year’s conference, we surveyed attendee’s producer sentiment and farm resilience to strategic risk. Survey responses offer unique insights into resilience and producer sentiment of some of Indiana’s leading farmers.

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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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