View from the Cab: Not all bad

By Kent Casson

Despite much uncertainty in the world of agriculture these days, many farmers remain optimistic heading into a new growing season.

Though we have seen some dips, grain markets have bounced back nicely in late January and early February. We will see if this keeps up as crop insurance prices are set for the year and we think about opening those shed doors for planting preparations.

Fears of a trade war have subsided a bit since proposed tariffs have been delayed for both Mexico and Canada, though China is still threatening tariffs of its own. Markets seemed to take the news okay and actually rebounded at the start of last week, much to the surprise of farmers.

The positive outlook continues for farmers as the January Purdue University CME Group Ag Economy Barometer Index rose five points to a reading of 141, which was higher than the prior month’s reading. This rise can be attributed to a rise in the Current Conditions Index. The January survey was conducted from January 13-17.

Producers seem to feel better about current conditions for the industry as fewer described low crop and livestock prices as a main concern. This shift in attitude was likely due to a crop price improvement between the December and January surveys.

The good news is that the investment index is stronger than last summer when the reading dipped to a low of 31. January’s index reading was actually the second-highest from the past few years. Time will tell if the improved attitude of producers means more machinery purchases and other investments.

Concerns remain among farmers on the future of ag trade with many respondents saying trade policy will be the most important policy for their farm over the next handful of years and 40 percent of producers believe a trade war is either likely or very likely in the future.

Almost 20 percent of respondents anticipate a bigger operating loan this season compared to a year ago. Most of those expecting a bigger loan claim it is because they are carrying over unpaid operating debt from prior years.

It is always nice to have a clean slate where we can start over for another crop year. Hopefully, yields hold up in 2025 and prices stay at decent levels so farmers remain profitable or can at least stay afloat another year.