Purdue Agricultural Economics Report (PAER)

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:

2024-08 PAER Purdue Farmland Values and Cash Rents Survey Results

August 9, 2024

The Purdue Farmland Value and Cash Rents Survey suggests Indiana farmland prices grew at a record pace between June 2023 and June 2024, exceeding previous highs set in 2023.

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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.

Firm Financial Health of Publicly Traded Agribusinesses

Publication Date: May 2024

Article ID: PAER-2024-16

Binayak Kunwar, Graduate Research Assistant

Summary: This report discusses various financial ratios of agribusinesses, focusing on four major indicators of financial performance: Profitability, Liquidity, Solvency, and Efficiency. Although overall financial health of agribusinesses is generally satisfactory, the report recommends agribusinesses should cautiously adopt risk management strategies.

Comparing the Effectiveness of Conservation Incentives

Publication Date: May 2024

Article ID: PAER-2024-17

Megan N. Hughes, Graduate Research Assistant; Meilin Ma, Assistant Professor of Agricultural Economics; and Carson Reeling, Interim Graduate Program Chair of Agricultural Economics

Summary: Using a dynamic model, this study compares the effectiveness of conservation incentive programs for the adoption of cover crops.

The Pricing of Carbon-Linked Bonds for Agricultural Systems in Transition: Implications and Applications

Publication Date: May 2024

Article ID: PAER-2024-18

Morgan P. Mastrianni, Graduate Research Assistant; and Calum G. Turvey, Economist

Summary: This paper examines the application of commodity-linked bond structures to carbon futures markets as a potential model for future expansion of the suite of the suite of green financial products available to investors in agriculture.

Do High Rebates Guarantee High-Cost Savings?

Publication Date: May 2024

Article ID: PAER-2024-19

Yi Wang, Graduate Research Assistant

Summary: Examine the impact of the WIC infant formula rebate system on the market, leading to monopolies in state WIC segments and sparking debates over cost containment and welfare outcomes.

Impacts of Mexico’s Proposed GMO Ban for US and Global Corn Trade

Publication Date: May 2024

Article ID: PAER-2024-20

Dewey J. Robertson, Graduate Research Assistant; and Roman Keeney, Associate Professor of Ag Economics

Summary: As Mexico’s proposed GMO ban is being reviewed by the USMCA trade dispute panel, we look to identify the economic implications of such a ban. Our findings show that Mexican producers will increase domestic productions and see income rises at the expense of US grain sector incomes.

The Outlook for the U.S. Economy in 2024