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Purdue Ag Economy Barometer Indicates Optimism About Future Despite Current Cost-Price Squeeze
Iowa Ag Connection - 04/03/2024

The Purdue University/CME Group Ag Economy Barometer climbed 3 points in March to 114, largely due to more optimistic expectations for the future.

While slightly higher than February's reading, the results remain far below the peaks seen in 2021.

Each month, Purdue ag economists survey 400 farmers to discern their attitudes and sentiments about the status of the farm economy. A barometer of 100 is equivalent to the base period of October 2015 to March 2016.

This month's survey was taken March 11-15, 2024, before USDA's Prospective Plantings report. It showed farmers only intend to plant 90 million acres of corn, 2 million acres less than anticipated, and sent corn prices sharply higher.

In a podcast reviewing the barometer's results, James Mintert, Director of the Center for Commercial Agriculture, said the overall index is in a sideways pattern, but interesting threads emerge in the comparison of future expectations and current conditions.

"Even though it was a small rise in the barometer, all of that came about because people became more optimistic about the future," he said. The Index of Future Expectations was 5 points higher than February. The Index of Current Conditions was 2 points lower than last month, but 25 points below the same time last year.

On the top of the list of farmers' concerns are high input costs, followed by lower crop prices and higher interest rates. Overall, Associate Director of the Center for Commercial Agriculture Michael Langemeier's breakeven projections are a bit lower than last year, and many inputs have already been purchased, leaving concerns about fuel and labor costs as ones with some room left to fluctuate.

"I suspect that part of what we're picking up is this concern about just how costly inputs are in general. We're locking in high breakeven prices," Mintert said.

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