Farmers more optimistic about ag economy in February

WEST LAFAYETTE, Ind. — The Purdue University/CME Group Ag Economy Barometer rose three points to 116 in February.

Farmers were more optimistic about current conditions, but less optimistic about future expectations on the farm.

“Many operations are still feeling financial pressure compared to a year ago, which is evident in their cautious investment strategies and a more reserved outlook for the coming year,” said Michael Langemeier, director of Purdue’s Center for Commercial Agriculture.

According the survey, approximately 44% of producers report their operation is worse off than last year. Only 7% plan to increase machinery purchases.

However, 51% of farms still expect to expand over the next five years and 36% plan to bring another family member into the business.

Other report highlights:

• 29% expecting their farm’s financial performance to worsen over the next 12 months, while 18% anticipate an improvement.

• The Farm Capital Investment Index increased three points to 50.

• 15% of respondents said they plan to reduce the size of their operation, while 34% reported no plans to grow.

• 14% of respondents said they expect U.S. agricultural exports to decline over the next five years, down from 16% in January.

• The Short-Term Farmland Value Expectations Index rose from 117 to 123.

• The Long-Term Farmland Value Expectations Index, which reached a record high of 166 in December, declined to 150 in February.

• Farmers said that alternative investments, net farm income and interest rates are the three most influential factors shaping farmland values.

• Nearly half said they plan to use payments from the Farmer Bridge Assistance Program to pay down debt, while 27% plan to strengthen working capital.

Learn more at purdue.edu/agbarometer.