July 25, 2021

Ag Economy Barometer: Farmers concerned about federal policy

Barometer shows uptick in ag economy optimism

WEST LAFAYETTE, Ind. — Farmers expressed concern about federal policy issues that may surface, according to the Purdue University/CME Group Ag Economy Barometer.

“Compared to October, farmers in November and December said they expect to see more restrictive environmental regulations, higher estate taxes, higher income taxes, a weaker farm income safety net and reduced support for the ethanol industry,” said James Mintert, director of the Center for Commercial Agriculture at Purdue.

Over 80% of farmers said they expect environmental regulations to become more restrictive in December, compared to 41% who felt that way in October.

More than 70% of producers expect to see higher income and estate taxes compared to 35% and 40%, respectively, in October.

Just over one-fourth of producers said they expect government support for the ethanol industry to weaken compared to 17% who felt that way in October, according to the report.

The group of 400 producers also showed an increase in optimism about the ag economy in December compared to November.

The barometer increased seven points from November to a reading of 174.

“The rise was primarily attributable to an improvement in the Index of Current Conditions Index, which rose 15 points compared to November,” Mintert said.

“The Index of Future Expectations also rose, but that increase was just five points compared to November. The Farm Capital Investment Index to a record high reading of 93 compared to a reading of 80 a month earlier. That is dramatically higher than it was back in April.”

The percentage of farmers expecting to increase their machinery purchases in the upcoming year rose five points to 15% in December, while the percentage expecting to reduce their purchases declined by the same amount.

Read the full Ag Economy Barometer report at https://purdue.ag/agbarometer.

Erica Quinlan

Field Editor