According to Purdue University, the February’sAg Economy Barometerreading of 165 changed little compared to January when the index stood at 167.
Producers continue to report strong current conditions on their farms as February’sCurrent Conditions Indexvalue of 200 is near its all-time high. Continuing a trend that got underway last fall, however, theIndex of Future Expectationsdrifted lower to a reading of 148, 3 points below its January reading.
February marked the third time in the last four months that theFuture Expectations Indexdeclined, leaving it 20% below its October peak. Ongoing strength in ag commodity prices and farm income continue to support producers’ perspective on current conditions while concerns about possible policy changes affecting agriculture and eroding confidence in future growth in ag trade continue to weigh on producers’ future expectations.
Relative to last fall, producers appear to be less confident about future growth in agricultural trade and are concerned about possible shifts in environmental and tax policy that could negatively impact the farm sector, leading them to be less confident about future conditions in the farm sector. Finally, producers indicated they expect to see alternative protein sources increase market share in the years ahead and, if the market share becomes significant, they think it’s likely to reduce aggregate farm income.
TheAg Economy Barometeris calculated each month from 400 U.S. agricultural producers’ responses to a telephone survey. This month’s survey was conducted from February 15-19, 2021.
-- James Mintert and Michael Langemeier, Purdue Center for Commercial Agriculture
Download the PDFhere.
Find the audio podcast discussion for insight on this month’s sentiment atpurdue.ag/agcast.
