Farmers worry but like U.S. direction

James Mintert and Michael Langemeier Purdue Center for Commercial Agriculture

The Purdue University-CME Group Ag Economy Barometer index has declined for the second month in a row. The July index decreased 11 points from June’s reading. The change was fueled by U.S. farmers’ weaker perceptions regarding both current conditions and their expectations for the future. The July Current Conditions Index decreased 17 points while the Future Expectations Index declined 7 points, both compared to a month earlier. Weaker income prospects in 2025 were largely responsible for farmers’ weaker appraisal of current conditions. Although all three principal farmer-sentiment indices were less in July than a month earlier, producer sentiment remains much more positive than at this time in 2024, with almost three-quarters of July’s survey respondents reporting that the United States is headed “in the right direction.” The July barometer survey took place July 7-11, 2025.

Concerns about weak income prospects in 2025 were evident in the July survey; the Farm Financial Performance Index decreased 14 points compared to a month earlier. This month’s decline left the index at a reading of 90, indicating that more farmers expect weaker rather than stronger income in 2025 compared to 2024. Weakening crop prices are eroding income prospects. For example in the eastern Corn Belt, bids for fall harvest delivery of corn and soybeans were 7 percent and 3 percent less during the July survey week, respectively, than just four weeks earlier. In turn, the decline in farmer-income prospects helped decrease the Farm Capital Investment Index by 7 points in July to a reading of 53.

Unsurprisingly, a weaker income outlook led to a softer outlook for farmland values in the upcoming year. The Short-Term Farmland Value Expectations Index dipped to 5 points less than a month earlier. This month’s reading of 115 also left the index 3 points less than a year earlier and 10 points less than two years ago. The farmland-index weakness was attributable to a small shift among respondents away from expecting values to increase, to looking for weakening values in the upcoming year. The percentage expecting values to hold steady increased just 1 point to 57 percent. With farmland-leasing discussions for next year underway between farmers and landowners, this month’s survey included a question regarding crop-producer expectations for farmland cash-rental rates in 2026. Despite weakening crop-income prospects, almost three-fourths of respondents said they expect cash-rental rates in 2026 to remain about the same, with just 11 percent of crop producers indicating they expect rental rates to decline.

One supporting factor for both farmland values and farmland cash-rental rates could be producer expectations regarding the farm-income safety net provided by U.S. farm programs. In this month’s survey, 31 percent of respondents said they expect the safety net in the 2025 farm bill to be stronger than in the previous farm bill.

U.S. farmers in July were somewhat more optimistic about future agricultural trade prospects than a month earlier. This month, 43 percent of respondents said they expect agricultural exports to increase in the upcoming five years, an increase from 41 percent a month earlier. Fewer producers said they look for exports to decline, decreasing to 13 percent of respondents – from 16 percent who felt that way in June. In a related question, 64 percent of this month’s survey respondents said they think it likely that new foreign export markets will open to American agricultural goods in the next five years. To further gauge U.S.-farmer outlook regarding trade and policy, this month’s survey included another question. “Would you say things in the United States today are generally headed in the right direction or on the wrong track?” Seventy-four percent of respondents said the United States is headed in the “right direction.”

Wrapping Up

U.S.-farmer sentiment declined in July as weaker farm-income prospects dimmed producers’ view of current conditions and their future expectations. Despite a weaker crop-income outlook, just 11 percent of crop producers said they expect farmland cash-rental rates to decline, with a majority reporting that they expect rental rates to stay about the same. Helping to support producers’ farmland-value and rental-rate outlook is farmer expectation for a stronger farm-income safety net, with almost one-third of U.S. producers saying they expect the 2025 farm bill to provide a stronger safety net than the previous farm bill. Producers in July were somewhat more optimistic about U.S. agricultural trade prospects than in June. And almost three-fourths of U.S. farmers responding to the survey reported that they believe things in the United States are headed “in the right direction.”