Farmers Likely to Increase Machinery Purchases in 2021

WEST LAFAYETTE, IN – As crop prices improve, farmers and ranchers appear more optimistic to make large investments in their operations. According to the December Purdue University/CME Group Ag Economy Barometer, the Farm Capital Investment Index increased (+13 points) to a record high (93) as the percentage of farmers expecting to increase their machinery purchases in the upcoming year tripled. Farmers were also bullish about farmland values and cash rental rates. In December, the percentage of farmers expecting farmland values to rise over the next year increased and the percentage expecting farmland values to rise over the next five years increased to an all-time high. Reflecting the improvement in crop production profitability, more producers also said they expect farmland cash rental rates to increase this year when compared to survey results from late summer. Farmers were less optimistic when asked about the ongoing trade dispute between the U.S. and China. In the first quarter of 2020, an average of 76 percent of respondents thought the trade dispute’s ultimate resolution would favor U.S. agriculture, by spring that average declined to 62 percent, and by December it dropped to an all-time survey low of 47 percent.
(SOURCE: All Ag News)