Key Takeaways
- Farmer sentiment strengthened in January, with the Purdue University/CME Group Ag Economy Barometer rising 5 points to 141.
- Current Conditions Index increased by 9 points, while the Future Expectations Index rose by 3 points.
- Farm Financial Performance Index climbed 13 points, indicating optimism for 2025’s financial outlook.
- Short-Term Farmland Value Expectations Index increased to 115, reflecting improved confidence in farmland values.
- Trade policy remains a top concern, with 40% of farmers believing a trade war is “likely” or “very likely.”
- Solar leasing interest continues to grow, with 11% of farmers discussing solar lease opportunities in the past six months.
Farmer Sentiment Strengthens Amid Rising Crop Prices
U.S. farmers started 2025 on a positive note, as the January Purdue University/CME Group Ag Economy Barometer climbed 5 points to 141. This increase was largely driven by a 9-point gain in the Current Conditions Index and a 3-point rise in the Future Expectations Index.
Higher corn and soybean prices between December and mid-January contributed to improved farmer sentiment, as did a reduction in concerns over crop and livestock prices. Notably, Eastern Corn Belt prices for near-term delivery of corn and soybeans rose by 9% and 5%, respectively, during this period.
Future Looks Bright?
Despite the overall improvement, farmer sentiment regarding future expectations remained significantly higher than views on current conditions, with the Future Expectations Index exceeding the Current Conditions Index by 47 points.
“This month’s survey reflects an encouraging level of optimism among U.S. farmers, particularly regarding their expected financial performance in 2025,” said Michael Langemeier, the barometer’s principal investigator and director of Purdue University’s Center for Commercial Agriculture. “However, there are still financial concerns, as more farmers reported challenges paying off operating loans and ongoing uncertainties in agricultural trade.”
Farm Financial Performance Index Sees a Strong Rebound
The Farm Financial Performance Index rose 13 points in January, closely mirroring the Current Conditions Index increase. This suggests that farmers are expecting a stronger financial year in 2025 compared to 2024.
Meanwhile, the Farm Capital Investment Index remained steady at 48, unchanged from December. Although the index is well above last summer’s low of 31, it remains to be seen whether farmers’ optimism will translate into increased investments in machinery or infrastructure.
Farmer Sentiment on Farmland Values Rebounds
The Short-Term Farmland Value Expectations Index climbed 5 points in January, returning to its November 2024 level of 115. Farmers’ confidence in farmland values has stabilized after a late-summer decline, when weaker crop prices caused a downturn.
Despite this rebound in short-term farmland sentiment, the Long-Term Farmland Value Expectations Index dropped 5 points to 150. However, it remains 8 points higher than its 12-month low recorded in August 2024.
Trade Policy Concerns Persist Despite Slight Improvement
Agricultural trade continues to be a major concern for U.S. farmers. In January, 42% of producers named trade policy as the most important policy issue for their farm over the next five years, far surpassing the 17% who identified the crop insurance program as their top concern.
While farmer sentiment regarding the likelihood of a trade war remains high, concerns have eased slightly since December. Currently, 40% of farmers believe a trade war is “likely” or “very likely,” down from 48% in the previous month. Conversely, the percentage of farmers who think a trade war is “unlikely” or “very unlikely” increased from 21% in December to 29% in January.
Growing Interest in Solar Leasing
Interest in leasing farmland for solar energy production continues to expand. In January’s survey, 11% of farmers reported discussing solar lease agreements within the last six months.
Notably, 40% of respondents received lease offers of $1,250 per acre or more, while 26% were offered rates of $1,500 per acre or more. Additionally, 54% of contracts included escalator clauses, most commonly ranging from 2% to 3% annually, though some reported escalators of 3% to 4% per year.
Overall, 3% of farmers or their landowners reported having signed a solar lease.
Looking Ahead: Farmer Sentiment Remains Cautiously Optimistic
While farmer sentiment improved in January, concerns about agricultural trade, financial stability, and supply chain disruptions remain. The 2025 outlook will depend on how well farmers navigate these challenges while leveraging higher crop prices, investment opportunities, and alternative revenue streams such as solar energy leasing.
Read the entire report here.