The monthly Purdue University/CME Group Ag Economy Barometer rose 12 points in March to a reading of 177, marking the highest reading for the barometer since October 2020, Purdue University agricultural economist, said in a release.
The Ag Economy Barometer is calculated each month from 400 U.S. agricultural producers’ responses to a telephone survey. This month’s survey was conducted from March 22-26, 2021.
The overall barometer rise was attributed to producers’ more optimistic views of the future, Mintert said, with the Index of Future Expectations snapping a four-month decline, rising 16 points to a reading of 164.
CURRENT CONDITIONS INDEX TIES HIGH
The Index of Current Conditions tied with its previous high, rising two points to a reading of 202, the release said. Even with a rebound in crop production in 2021, it looks like carryover supplies of corn and soybeans will remain tight and this seemed to give producers confidence that crop prices will remain strong this year.
Additionally, expectations for a smaller pork supply combined with a rebound that appears to be on the horizon for the US economy this summer provided some optimism in the livestock sector, he said.
“YES” TO INVESTMENT
In March, producers continued to be relatively optimistic about making farm machinery purchases and capital investments in their farming operations, Mintert said. The Farm Capital Investment Index held at a reading of 88, just 5 points below its all-time high of 93.
Since March 2020, when farmers’ confidence in the agricultural economy plummeted as the pandemic was unfolding, the investment index has risen 63%, he said.
Farmers’ bullish views on farmland values in the coming year and in the next five years continued in March, the release said. The Short-Term Farmland Value Expectations Index rose for the fourth straight month, up three points to a reading of 148.
The Long-Term Farmland Value Index, matched its previous high set in December, up four points to a reading of 157, Mintert said. Compared to the May 2020 low point, producer perspective regarding long-term farmland values was up 22%.
THE CATCH
The topic that producers were not optimistic about related to trade negotiations with China, the release said.
The percentage of producers who expected the trade dispute with China to be resolved in a way that’s beneficial to US agriculture peaked at 81% in early 2020. Since then, this percentage has been in a freefall, down more than 50 points to a reading of 31% in March.
CATTLE, BEEF RECAP
Limited fed cattle trading was reported in the Plains Tuesday at $121 per cwt on a live basis, up $0.50 from the peak of last week’s range of $116 to $120.50. Dressed-basis trading last week was at $184 to $190 per cwt, unchanged to up $5.
The USDA choice cutout Tuesday was up $4.10 per cwt at $262.77, while select was up $1.44 at $251.30. The choice/select spread widened to $11.47 from $8.81 with 83 loads of fabricated product and 40 loads of trimmings and grinds sold into the spot market.
The USDA reported Tuesday that basis bids for corn from livestock feeding operations in the Southern Plains were unchanged at $1.25 to $1.28 a bushel over the May CBOT futures contract, which settled at $5.54 1/4 a bushel, up $0.01.
There were 20 heifer and 44 steer contracts tendered for delivery Tuesday against the Apr futures contract. Ten more heifer and 35 steer contracts were retendered at 1 with the 10 heifer contracts reclaimed at 1.
The CME Feeder Cattle Index for the seven days ended Monday was $139.70 per cwt, down $0.10. This compares with Tuesday’s Apr contract settlement of $146.47 per cwt, up $0.02.