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Farmer sentiment rises on strengthening current financial position

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January 4, 2022

Farmer sentiment rises on strengthening current financial position

Farmer sentiment rises on strengthening current financial position. (Purdue/CME Group Ag Economy Barometer/James Mintert).
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WEST LAFAYETTE, Ind. and CHICAGO — The Purdue University/CME Group Ag Economy Barometer rose for less than the second time since May, up 9 factors to a studying of 125 in December. The Index of Current Conditions and the Index of Future Expectations additionally rose this month with a stronger current circumstances index primarily chargeable for the barometer’s rise. The December’s Index of Current Conditions rose 18 factors to a studying of 146, whereas the Index of Future Expectations rose 4 factors to a studying of 114. The Ag Economy Barometer is calculated every month from 400 U.S. agricultural producers’ responses to a phone survey. This month’s survey was carried out Dec. 8-14.

December marked the second month in a row that farmers reported a stronger financial efficiency for his or her farms. The Farm Financial Performance Index rose 7 factors to 113 in December which is the index’s highest studying since May and is 21% larger than readings obtained simply earlier than the pandemic’s onset.

“Excellent crop yields this fall, combined with strong crop prices, provided many producers with their most positive cash flow in recent years. That combination helps explain the year-end rise in the financial index as well as the barometer overall,” stated James Mintert, the barometer’s principal investigator and director of Purdue University’s Center for Commercial Agriculture.

Even as provide chain points proceed to hamper producers’ capital funding plans, the Farm Capital Investment Index rose in December, up 10 factors to a studying of 49. This marks probably the most constructive worth for the funding index since August, however stays 47% decrease than in December. The funding index’s enchancment was primarily the results of fewer producers in December saying they deliberate to cut back their equipment purchases within the upcoming 12 months, responding as an alternative that they plan to carry their investments regular with the prior 12 months. This month, 45% of survey contributors stated that low farm equipment stock ranges impacted their farm equipment buy plans.

Farmers expressed concern about rising manufacturing prices and the supply of manufacturing inputs. When requested what their greatest issues are for his or her farming operation within the upcoming 12 months, 47% of respondents chosen larger enter price from an inventory that included decrease crop and/or livestock costs, environmental coverage, farm coverage, local weather coverage and COVID’s affect. Over half (57%) of producers stated they count on farm enter costs within the upcoming 12 months to rise by greater than 20% in contrast with a 12 months earlier, and practically 4 out of 10 respondents stated they count on enter costs to rise by greater than 30%.

This month’s survey additionally requested crop producers if they’ve had any problem buying crop inputs from their suppliers for the 2022 crop season. Nearly 4 out of 10 (39%) of respondents stated they’ve skilled some difficulties. In a follow-up query, producers who indicated that they had been experiencing difficulties in making purchases had been requested which crop inputs they’ve had hassle buying. Responses had been diverse, which might be a sign of issues throughout the availability chain and included difficulties in buying fertilizer (31%), herbicides (28%), farm equipment elements (24%) and pesticides (17%).

Both the short-term and long-term farmland worth indices declined barely in December. The Short-Term Farmland Value Expectation Index declined 4 factors to 153, whereas the long-term index declined 6 factors to 152. Although each indices declined in December, they continue to be close to their all-time highs. Producers who indicated they count on farmland values to rise over the following 5 years had been requested a follow-up query asking them about the primary cause they count on farmland values to rise. Producers indicated nonfarm investor demand (61%), low rates of interest (13%), and robust farm money flows (11%) had been their main causes for anticipating values to rise.

Read the total Ag Economy Barometer report. The web site additionally gives extra sources – akin to previous stories, charts and survey methodology – and a kind to enroll in month-to-month barometer electronic mail updates and webinars.

Each month, the Purdue Center for Commercial Agriculture supplies a brief video evaluation of the barometer outcomes. For much more data, try the Purdue Commercial AgForged podcast. It features a detailed breakdown of every month’s barometer, along with a dialogue of current agricultural information that impacts farmers.

The Ag Economy Barometer, Index of Current Conditions and Index of Future Expectations can be found on the Bloomberg terminal beneath the next ticker symbols: AGECBARO, AGECCURC and AGECFTEX.

About the Purdue University Center for Commercial Agriculture

The Center for Commercial Agriculture was based in 2011 to offer skilled growth and academic packages for farmers. Housed inside Purdue University’s Department of Agricultural Economics, the middle’s school and employees develop and execute analysis and academic packages that handle the completely different wants of managing in in the present day’s enterprise atmosphere.

About CME Group

As the world’s main and most various derivatives market, CME Group (www.cmegroup.com) allows purchasers to commerce futures, choices, money and OTC markets, optimize portfolios, and analyze information – empowering market contributors worldwide to effectively handle threat and seize alternatives. CME Group exchanges supply the widest vary of world benchmark merchandise throughout all main asset lessons based mostly on rates of interest, fairness indexes, international change, power, agricultural merchandise and metals. The firm gives futures and choices on futures buying and selling by the CME Globex® platform, mounted revenue buying and selling by way of BrokerTec and international change buying and selling on the EBS platform. In addition, it operates one of many world’s main central counterparty clearing suppliers, CME Clearing. With a variety of pre- and post-trade services underpinning the whole lifecycle of a commerce, CME Group additionally gives optimization and reconciliation companies by TriOptima, and commerce processing companies by Traiana.

CME Group, the Globe emblem, CME, Chicago Mercantile Exchange, Globex, and E-mini are logos of Chicago Mercantile Exchange Inc. CBOT and Chicago Board of Trade are logos of Board of Trade of the City of Chicago, Inc. NYMEX, New York Mercantile Exchange and ClearPort are logos of New York Mercantile Exchange, Inc. COMEX is a trademark of Commodity Exchange, Inc. BrokerTec, EBS, TriOptima, and Traiana are logos of BrokerTec Europe LTD, EBS Group LTD, TriOptima AB, and Traiana, Inc., respectively. Dow Jones, Dow Jones Industrial Average, S&P 500, and S&P are service and/or logos of Dow Jones Trademark Holdings LLC, Standard & Poor’s Financial Services LLC and S&P/Dow Jones Indices LLC, because the case could also be, and have been licensed to be used by Chicago Mercantile Exchange Inc. All different logos are the property of their respective house owners.  

Writer: Kami Goodwin, 765-494-6999, kami@purdue.edu

Source: James Mintert, 765-494-7004, jmintert@purdue.edu

Media Contacts:

Aissa Good, Purdue University, 765-496-3884, aissa@purdue.edu

Dana Schmidt, CME Group, 312-872-5443, dana.schmidt@cmegroup.com

Related web sites:

Purdue University Center for Commercial Agriculture: http://purdue.edu/commercialag

CME Group: http://www.cmegroup.com/

Agricultural Communications: (765) 494-8415;

Maureen Manier, Department Head, mmanier@purdue.edu  

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