Key Takeaways
- Farmer Sentiment fell 12 points to 146, driven by reduced expectations for the future
- Index of Future Expectations dropped 18 points, while Current Conditions Index saw only a slight decline
- Financial outlook and export optimism weakened, though sentiment remains above 2023 levels
- Investment index rose modestly, but machinery purchase plans suggest continued spending restraint
- Fewer farmers now believe in the benefits of free trade compared to 2020
Farmer Sentiment Weakens as Future Outlook Deteriorates
The latest Farmer Sentiment data from the Purdue University/CME Group Ag Economy Barometer showed a notable decline in June, breaking a two-month trend of improving outlooks among U.S. agricultural producers. The overall barometer reading dropped 12 points to 146, primarily due to a sharp 18-point fall in the Index of Future Expectations, which also settled at 146. In contrast, the Current Conditions Index only edged down by 2 points to 144, indicating a relatively stable perception of present-day conditions.
The survey, conducted from June 9 to 13, revealed growing concern about the long-term prospects of agricultural exports, which appears to be the main driver behind the sentiment shift.
Farm Financial and Investment Sentiment Diverge
Despite the weakening farmer sentiment, some financial indicators remain stable. The Farm Financial Performance Index dropped by 5 points to 104, reflecting a slightly more cautious economic outlook among producers for 2025. Nevertheless, the index continues to suggest farmers expect stronger performance next year compared to 2024, supported in part by strong income potential in the livestock sector—particularly beef.
On the other hand, the Farm Capital Investment Index rose by 5 points to 60, nearly matching April’s reading. This increase came as more producers—24%, up from 19%—said June was a good time to invest. However, this sentiment has not translated into plans for increased equipment purchases. In fact, 54% of respondents now plan to reduce farm machinery investments, up 6 points from May.
Land Values and Trade Outlook Add Complexity to Farmer Sentiment
The Short-Term Farmland Value Expectations Index also weakened slightly, falling 4 points to 120. The percentage of producers expecting an increase in farmland values decreased from 37% to 32%, though more now believe values will remain steady.
A shift in attitudes toward agricultural trade further impacted farmer sentiment. Between May and June, the percentage of producers who believe agricultural exports will rise over the next five years dropped from 52% to 41%. Those anticipating a decline rose to 16%, up from 12%.
This export pessimism appears connected to broader views on trade policy. Only 31% of producers strongly agreed in June that free trade benefits U.S. agriculture and other industries—a significant decrease from 49% in fall 2020.
Tariff Worries Persist, But Less Severe Than Earlier in 2024
When asked about the impact of U.S. tariffs on farm income, 45% of producers in the June survey said they expected a negative or very negative impact, down from 56% in March and April. Meanwhile, those expecting a positive or very positive impact rose to 27%, an increase of 4 percentage points over the same time frame.
Michael Langemeier, the barometer’s principal investigator, noted that while farmer sentiment has weakened, the concerns are concentrated in long-term expectations.
“Reduced optimism about the future of U.S. agriculture’s export prospects stands out as a major cause of the shift in sentiment,” he said. “Although farmers remain concerned that U.S. tariff policies will reduce their income, fewer producers in May and June said they expect a negative or very negative impact on their income than they did in March and April.”
Read the complete U.S. Farmer Sentiment barometer here.
