Key Takeaways
- The Purdue University/CME Group Ag Economy Barometer rose 11 points to 152, reflecting stronger farmer sentiment.
- The Current Conditions Index saw a significant 28-point increase, while the Future Expectations Index rose 3 points to 159.
- Farm Capital Investment Index climbed 11 points to its highest level since May 2021, indicating greater confidence in farm investments.
- Short-term farmland value expectations improved slightly, with the index rising 3 points from January.
- Trade policy and the farm bill remain key concerns for U.S. farmers, with 48% of respondents expecting a trade war to impact exports.
Farmer Sentiment Strengthens Amid Economic Shifts
The Purdue University/CME Group Ag Economy Barometer recorded an 11-point increase in February, reaching a reading of 152. The rise was largely driven by improving current conditions, as the Current Conditions Index climbed 28 points to 137. This marks a strong recovery from its low of 76 in late summer and early fall of 2024.
By contrast, the Future Expectations Index saw a more modest 3-point increase, reaching 159. This suggests that farmers remain optimistic about long-term prospects, with future expectations continuing to outpace current conditions by 22 points.
The survey, conducted from February 10-14, points to higher crop prices, anticipated disaster payments, and strength in the U.S. livestock sector as key factors behind the improved sentiment.
U.S. Farmer Sentiment In February: Increased Confidence in Farm Investments
The Farm Capital Investment Index, which tracks sentiment regarding large farm-related purchases, rose 11 points to 59, its highest level since May 2021. This month’s improvement was notably driven by farmers’ more positive assessment of current conditions, as opposed to long-term expectations, which had been the primary driver in previous months.
Meanwhile, the Farm Financial Performance Index remained steady at 110, only one point below January’s reading of 111. While the index saw little change this month, it remains well above last fall’s low of 68.
“While sentiment about the future remains strong, as reflected in the Future Expectations Index, there’s growing interest in making larger investments in farm operations,” said Michael Langemeier, principal investigator of the Ag Economy Barometer and director of Purdue University’s Center for Commercial Agriculture.
Farmland Values and Growth Expectations
The Short-Term Farmland Value Expectations Index increased 3 points to 118, an 8-point gain from December and 3 points higher than a year ago. While producers remain less optimistic about farmland values compared to 2021 and 2022, their outlook has improved compared to the more cautious sentiment seen in late 2024.
Each February, the Ag Economy Barometer survey includes five-year farm growth projections. The 2025 survey found that 50% of farmers plan to either maintain their current operations (37%) or exit/retire (13%), nearly unchanged from the 52% recorded in 2024.
A notable shift occurred among farmers with higher growth expectations:
- 19% of respondents now anticipate their farms growing 10% to 15% or more annually, more than double the 9% from last year.
- This increase came alongside a decline in farmers expecting slow growth (less than 5%).
Policy Concerns: Trade and the Farm Bill
Trade policy and farm legislation remain top concerns for U.S. farmers.
- 62% of respondents believe passing a new farm bill in 2025 is either “important” (25%) or “very important” (47%).
- 44% of farmers identified trade policy as the most critical issue for their farm over the next five years, followed by the crop insurance program (18%).
Concerns over trade policy were further highlighted when farmers were asked about the likelihood of a trade war impacting U.S. agricultural exports: 48% believe a trade war is either “likely” (29%) or “very likely” (19%) in the near future.
“While the current outlook for U.S. agriculture has improved, farmers are closely watching trade policy and the potential for a new farm bill,” said Langemeier. “These ongoing policy concerns will likely play a critical role in shaping producer sentiment in the months ahead.”
Looking Ahead
With U.S. Farmer Sentiment continuing to rise, the stronger outlook on current conditions may indicate a shift toward increased investment and expansion in the agricultural sector. However, long-term concerns surrounding trade policy and farm legislation suggest that uncertainty remains a factor in decision-making.
The coming months will likely reveal how policy developments and economic conditions influence farmers’ willingness to invest, expand, or adapt in a changing agricultural landscape.
Read the complete barometer here.
