Farmers say current conditions on U.S. farms are weakening

Farmer sentiment held steady in September, as the Purdue University CME Group Ag Economy Barometer rose just 1 point to a reading of 126. However, there was a shift in producers' perceptions of current conditions and their expectations for the future. The Index of Current Conditions fell 7 points to 122, while the Index of Future Expectations climbed 5 points to 128. The survey was conducted following the U.S. Department of Agriculture's release of the September Crop Production report and the World Agricultural Supply and Demand Estimates report. These reflected farmers' concerns about current conditions, particularly over record-high corn and soybean yields, which were pressuring crop prices. At the same time, optimism about the future was supported by farmers' belief that U.S. policy is "headed in the right direction" and by expectations that potential government support, like the 2019 Market Facilitation Program (MFP), will provide payments to farmers in compensation for lower commodity prices. The barometer survey took place Sept. 15-19 .

The September Farm Financial Performance Index dropped 3 points to a reading of 88, marking the third consecutive month farmers have lowered their expectations for 2025 compared with 2024. Consistent with this more cautious outlook, fewer producers said now is a good time to make major investments in their operations, pushing the Farm Capital Investment Index down 8 points to 53.

Producers' short-term outlook for farmland values weakened for the fourth month in a row, as the Short-Term Farmland Values Expectations Index fell 6 points to 106. The index now stands 18 points below its 2025 peak from May of 124. The shift was driven by fewer producers expecting farmland values to rise and more anticipating farmland values to remain about the same, with 58% of respondents saying they expect farmland values to hold steady over the next year, up from 54% in August.

Policy changes appear to continue to shape farmers' perspectives in September. A substantial majority (71%) of farmers in this month's survey reported that things in the U.S. are "headed in the right direction," similar to the July and August survey results. However, confidence in the long-run impact of tariffs has weakened. Just over half of respondents (51%) said they expect tariffs to strengthen the U.S. agricultural economy, down from 63% of June's survey respondents and 70% of respondents in both the April and May surveys who said they expect the use of tariffs to have a long-term positive impact. At the same time, 30% now believe tariffs will weaken the agricultural economy, and 19% are uncertain — more than double the number of respondents who were uncertain in the spring.

Amidst growing concerns about tariffs, most farmers expect potential government support to help cushion the impact. In September, 83% of producers said a program similar to the 2019 MFP is likely if a trade war drives commodity prices lower, with 62% calling it "very likely" and another 21% saying it is "likely."

Each September since 2021, the Ag Economy Barometer survey has included several questions focused on cover crop usage by corn and soybean farmers, and just over half (53%) of farmers surveyed this month reported using cover crops on at least some of their acreage, a share that has ranged between 52% and 57% over the past five years. Among cover crop users, 40% said they adopted the practice within the last five years, while 9% have used cover crops for more than two decades. Survey trends also point to broader adoption across acreage: This year, 57% of cover crop users planted them on 26-50% of their acres, compared to only 25% in 2021 who reported planting cover crops on more than one-fourth of their acreage.

"High production costs and weak crop prices are pressuring farm incomes on U.S. crop farms," said Michael Langemeier , the barometer's principal investigator and director of Purdue's Center for Commercial Agriculture . "A large majority of U.S. farmers expect government support to bolster farm incomes if crop prices remain weak."

About the Purdue University Center for Commercial Agriculture
The Center for Commercial Agriculture was founded in 2011 to provide professional development and educational programs for farmers. Housed within Purdue University's Department of Agricultural Economics, the center's faculty and staff develop and execute research and educational programs that address the different needs of managing in today's business environment.

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About Purdue University
Purdue University is a public research university leading with excellence at scale. Ranked among top 10 public universities in the United States , Purdue discovers, disseminates and deploys knowledge with a quality and at a scale second to none. More than 106,000 students study at Purdue across multiple campuses, locations and modalities, including more than 57,000 at our main campus locations in West Lafayette and Indianapolis . Committed to affordability and accessibility, Purdue's main campus has frozen tuition 14 years in a row. See how Purdue never stops in the persistent pursuit of the next giant leap — including its integrated, comprehensive Indianapolis urban expansion; the Mitch Daniels School of Business; Purdue Computes; and the One Health initiative — at https://www.purdue.edu/president/strategic-initiatives .

Sources and Notes block:

Source: Michael Langemeier , mlangeme@purdue.edu , 765-494-9557

Author: Morgan French

Image caption: Farmers say current conditions on U.S. farms are weakening. ( Purdue University /CME Group Ag Economy Barometer/ James Mintert )

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SOURCE CME Group