The Indiana agriculture sector’s view of current economic conditions have changed little when comparing February to January.
The latest Purdue University/CME Group Ag Economy Barometer stood at 165 for February, down 2 points from January. The future expectation’s index continued to decline in February, down 20% from its October peak, dropping to a reading of 148.
The ag economy barometer is calculated monthly from 400 U.S. agricultural producers’ responses to a telephone survey. This month’s survey was conducted between Feb. 15 and Feb. 19.
Ongoing strength in ag commodity prices and farm income continue to support producers’ perspective on current conditions, according to the barometer. However, concerns about possible policy changes affecting agriculture, and eroding confidence in future growth in ag trade, continue to weigh on producers’ future expectations.
The Farm Capital Investment Index also fell in February to 88, five points below both its December and January readings. Farmers in February were less optimistic regarding their upcoming farm machinery purchase plans than they were the past two months as the percentage of producers’ intent on raising their machinery purchases in the upcoming year dipped to 9%, compared to 15% who expected to increase purchases when surveyed in December and January.
Producers are bullish about farmland values, according to Purdue researchers. Fifty-one percent of respondents in February said they expect farmland values to rise during the next year, up 8 points from the January survey. U.S. farmers were also optimistic about the long-run trend in farmland values, as 62% of respondents indicated farmland values are likely to rise over the next five years.
The percentage of farms expecting to see a better financial performance in 2021 compared to the prior year has risen since last summer. In the February survey, it reached 37%, up 4 points from January and was 25 points higher than last July.