AgriBusiness

Farmer Sentiment Declines Sharply in July Amid Income and Investment Concerns

Farmer sentiment strengthened in January, with the Purdue University/CME Group Ag Economy Barometer rising 5 points to 141.
Photo by Warren on Unsplash

Key Takeaways

  • Farmer Sentiment Index dropped 11 points to 135 in July, reflecting weaker views on current and future conditions
  • Current Conditions Index fell 17 points; Future Expectations Index declined 7 points
  • Farm Financial Performance Index fell to 90 as crop price drops weighed on 2025 income expectations
  • Farmland value and rental rate outlooks remained mostly stable despite income concerns
  • Optimism rose around U.S. agricultural trade and policy direction

Farmer Sentiment Weakens as Income Outlook for 2025 Deteriorates

Farmer Sentiment fell notably in July, according to the latest Purdue University/CME Group Ag Economy Barometer report. The index dropped 11 points from June, landing at a reading of 135. The decline was driven by increasingly negative views on both current financial conditions and expectations for the future.

The Current Conditions Index fell 17 points to 127, while the Future Expectations Index dropped 7 points to 139. This dip in sentiment was largely attributed to weakening crop prices and broader financial concerns for the 2025 outlook.

“Producers held dim views of current conditions and future expectations, which weakened the sentiment of U.S. farmers in July,” noted Michael Langemeier, principal investigator of the barometer.


Income and Investment Indices Reflect Mounting Pressure

Accompanying the drop in Farmer Sentiment was a 14-point decline in the Farm Financial Performance Index, which fell to 90 in July. This reflects growing concern that income in 2025 will be lower than in 2024. Farmers in the eastern Corn Belt, for instance, reported July bids for fall corn and soybean deliveries down 7% and 3%, respectively, from the previous month.

Weaker income expectations also contributed to a 7-point decline in the Farm Capital Investment Index, now at 53. This indicates a more cautious stance on equipment and infrastructure investment in the near term.


Farmland Values and Rental Rates Remain Resilient

Despite declining income projections, the Short-Term Farmland Value Expectations Index saw only a modest drop of 5 points, reaching 115. Compared to one and two years ago, the index is down 3 and 10 points, respectively. Notably, the share of respondents expecting farmland values to remain steady increased slightly to 57%.

When asked about 2026 farmland cash rental rates, 73% of crop producers said they expect rates to stay mostly unchanged. Just 11% anticipated a decline, suggesting that Farmer Sentiment around land value remains relatively stable, even amid rising economic pressures.


Trade Optimism and Policy Confidence Offer Counterbalance

Although financial metrics declined, 74% of survey respondents indicated they believe the U.S. is “headed in the right direction” in terms of policy. Furthermore, 31% said they expect a stronger safety net in the 2025 farm bill compared to 2024.

Confidence in future trade also increased modestly. In July, 43% of farmers expected agricultural exports to grow over the next five years, up from 41% in June. The share anticipating declining exports dropped from 16% to 13%, while 64% of respondents said they believe new foreign markets will open to U.S. agricultural goods in the coming years.


Farmer Sentiment Outlook: Balancing Financial Concerns and Trade Optimism

While Farmer Sentiment softened in July due to worsening income expectations and restrained capital spending, optimism surrounding policy and trade may help stabilize outlooks in the months ahead. The July survey, conducted July 7–11, captures a critical moment as farmers enter farmland lease negotiations and begin financial planning for 2025.

Read the complete U.S. Farmer Sentiment barometer here.

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