Farmers more optimistic about ag economy

WEST LAFAYETTE, Ind. — Farmers seem more optimistic about the future, according to the latest reading of Purdue University/CME Group Ag Economy Barometer.

The barometer rose 12 points in March to a reading of 177, marking the highest reading since October 2020.

“Even with a rebound in crop production in 2021, it looks like carryover supplies of corn and soybeans will remain tight, providing producers’ confidence that crop prices will remain strong this year,” said James Mintert, director of the Center for Commercial Agriculture.

“A rebound in the U.S. economy this summer combined with expectations for a smaller pork supply is also providing some optimism in the livestock sector.”

Here are some top takeaways from the report.

Carbon Sequestration

Between 30% and 40% of respondents over the last three months say that they are aware of opportunities to receive carbon sequestration payments on their farms, Mintert said.

“A small percentage of farmers, 7% on the March survey, indicated that they’ve actually engaged in discussions with companies about payments on their farm,” he said. “Over 80% of those reporting that they’ve engaged in discussions said that those payment rates were $20 per acre or less.”

One percent of respondents say they’ve actually signed a carbon sequestration contract.

Farm Machinery

In March, producers continued to be relatively optimistic about making farm machinery purchases and capital investments in their farming operations, according the report.

Land Values

Farmers’ bullish views on farmland values, both in the upcoming year and in the next five years, continued in March.

China

Producers are less optimistic about trade relations with China. The percentage of producers who expect the U.S. trade dispute with China to be resolved in a way that’s beneficial to U.S. agriculture peaked at 81% in early 2020.

Since that time, the percentage who feel that way has been in a freefall, down just over 50 points to a reading of 31% in March.

View the complete report at ag.purdue.edu/commercialag/ageconomybarometer.