Farmers Short-term Expectations Improving, Fewer Facing Financial Stress

WEST LAFAYETTE, IN – Producers are becoming more optimistic about short-term expectations for their farms’ financial performance, with nearly one-third expecting better financial performance in the coming year compared to 2020.

According to the recently released Purdue/CME Group Ag Economy Barometer, when asked about the size of their operating loan, 17 percent of respondents expect their loan size to increase this year and, of those, 20 percent said the increased loan size is due to carrying over unpaid operating debt from the previous year.

This implies that 3 to 4 percent of those surveyed are suffering financial stress; however, that is half the number of farms identified as suffering financial stress one year ago.

Producers continue to think now is a relatively good time to make large investments in their farming operations.

The Farm Capital Investments Index held strong at its record high of 93 for the past two months.

The percentage of farmers expecting to increase their machinery purchases also held at its highest level over the last year of 15 percent in January.

Farmers also remained bullish about short-term farmland values and cash rental rates.

In January, 43 percent of respondents said they expect farmland values to rise over the next year (up 8 points from December) and 27 percent of respondents said they expect cash rental rates to rise in 2021 (up 9 points from last month).
(SOURCE: All Ag News)