Key Takeaways
- U.S. Farmer Sentiment improved for the second month in a row, reaching a reading of 158 in May—the highest since May 2021.
- Optimism was driven by improved export expectations and reduced concern over tariffs affecting farm income in 2025.
- The Farm Financial Performance Index rose, but the Capital Investment Index dropped, reflecting continued caution on new spending.
- More producers now anticipate rising farmland values, with 37% predicting an increase, up from 25% in April.
- Labor availability is an emerging concern, with 26% of producers expecting difficulties hiring due to immigration policy changes.
U.S. Farmer Sentiment Climbs Amid Export Optimism and Easing Tariff Concerns
U.S. Farmer Sentiment experienced a significant boost in May, according to the Purdue University/CME Group Ag Economy Barometer. The overall index rose 10 points from April to 158, its highest level in four years. Improvements were seen in both the Index of Current Conditions (up 5 points to 146) and the Index of Future Expectations (up 12 points to 164).
A key factor behind the improved outlook was a surge in positive sentiment about the future of U.S. agricultural exports. In May, 52% of respondents said they expect exports to grow over the next five years—up from 33% in April. Meanwhile, those expecting exports to decline dropped from 24% to 12%.
Producers also expressed a less negative view of U.S. tariff policies. The percentage who believed tariffs would negatively affect their farm income dropped from 56% in April to 43% in May, while those anticipating no impact rose to 30%.
Stronger Income Outlook, But Investment Hesitancy Remains
While sentiment around profitability improved, reflected in an 8-point increase in the Farm Financial Performance Index to 109, farmers expressed more caution on spending. The Farm Capital Investment Index dropped 6 points to 55, indicating fewer producers view this as a good time to invest in equipment or infrastructure.
Despite this decline, the index remains stronger than May levels seen in the past three years. Since November 2024, it has averaged 54—higher than the January to October 2024 average of 35.
Additionally, land value expectations rose. The Short-Term Farmland Value Expectations Index climbed to 124 in May, up 14 points from April. Thirty-seven percent of producers now expect values to increase, while those predicting steady values fell to 50%.
Views on Trade and Labor Reflect Mixed Sentiment
The May survey included questions on trade and labor availability. When asked whether “free trade benefits agriculture and most other American industries,” only 28% “strongly agreed,” down from 49% in fall 2020. This shift suggests a more cautious stance on trade policy benefits.
Regarding labor, 51% of respondents said they typically hire nonfamily workers. Of that group, 26% anticipated hiring challenges due to current U.S. immigration policies—10% expected “a lot of difficulty,” while 16% expected “some difficulty.”
Balancing Optimism and Caution
“While the uptick in sentiment is certainly notable, it’s important to recognize that producers are navigating a complex mix of optimism and caution,” said Michael Langemeier, principal investigator of the barometer and director of Purdue University’s Center for Commercial Agriculture. “Producers’ expectations for exports and farm income have improved, but concerns remain about capital investment and, for some operations, the potential for labor shortages due to immigration policy changes.”
As producers head into the 2025 season, U.S. Farmer Sentiment reflects both renewed confidence in market conditions and ongoing vigilance around structural challenges such as labor access and investment risk.
Read the complete U.S. Farmer Sentiment barometer here.
