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U.S. farmer sentiment edged slightly higher in October, with the Purdue UniversityCME Group Ag Economy Barometer rising 3 points to a reading of 129. The increase was fueled primarily by a rise in the Index of Current Conditions, which climbed 8 points to 130, while the Index of Future Expectations was virtually unchanged at 129, just 1 point higher than in September. Farmers' appraisals of current conditions highlight a "tale of two economies": Livestock producers remain highly optimistic about their farm conditions, partly supported by record-high profitability in the beef sector, while crop producers report a more pessimistic view of the current situation on their farms due to low profit margins across major crop enterprises. The barometer survey took place Oct. 13-17.
The Farm Financial Performance Index dropped to 78 in October, 10 points lower than in September, reflecting a sharp decline in farmers' financial performance expectations over the past few months. In May, the index stood at 109, 31 points above the October reading, before steadily falling through the spring and summer. Similar to the Index of Current Conditions, there continues to be a disparity between crop and livestock producers: Crop farmers expect their financial performance to fall well below that of a year ago, while livestock producers anticipate results similar to the previous year. Despite the overall decline in financial expectations, the Farm Capital Investment Index increased by 9 points to 62, boosted once again by optimism among livestock producers.
In previous barometer surveys, most producers said they expect the U.S. Department of Agriculture to provide compensation for weak commodity prices, similar to the 2019 Market Facilitation Program. This month, respondents were asked how they would use a potential supplementary payment from the USDA on their farms. More than half (53%) said they would use it to pay down debt, while one-fourth (25%) said they would strengthen their farm's working capital. Fewer producers said they would invest in farm machinery (12%) or cover family living expenses (11%).
The Short-Term Farmland Value Expectations Index rose 7 points in October to 113, following four months of declines. The shift in sentiment reflects more producers anticipating farmland values to increase rather than hold steady, reversing September's trend. This month, 30% of respondents said they expect farmland values to rise over the next year, up from 24% in September. The percentage expecting values to fall remained essentially unchanged at 17%, compared to 18% the previous month.
"U.S. farmers are adjusting to ongoing economic pressures in different ways," said Michael Langemeier, the barometer's principal investigator and director of Purdue's Center for Commercial Agriculture. "Livestock producers are seeing strong returns and remain optimistic, while many crop producers are contemplating management changes for 2026 to help cope with tighter margins."
To learn more about how crop producers will respond to weak operating margins, the October survey asked respondents who planted corn in 2025 about any crop production management changes they plan to make in 2026 in response to low corn prices. Nearly one-third (30%) said they do not plan to make any changes, while 29% said they plan to reduce phosphorus applications. Twenty-seven percent said they intend to adopt lower-cost seed traits or varieties, 16% plan to reduce nitrogen applications, while just 11% said they would lower corn seeding rates in 2026.
Policy uncertainty continues to influence farmer sentiment. In October, 58% of producers said they expect increased use of tariffs by the U.S. to strengthen the agricultural economy, up from September but still below the 70% reported in April and May. Meanwhile, 16% of respondents said they were uncertain about the impact of tariff policies on the agricultural economy, double that of both April and May. Despite this uncertainty, roughly 70% of producers said they believe the U.S. is headed in the "right direction."
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.
About CME Group
As the world's leading derivatives marketplace, CME Group (www.cmegroup.com) enables clients to trade futures, options, cash and OTC markets, optimize portfolios, and analyze data – empowering market participants worldwide to efficiently manage risk and capture opportunities. CME Group exchanges offer the widest range of global benchmark products across all major asset classes based on interest rates, equity indexes, foreign exchange, cryptocurrencies, energy, agricultural products and metals. The company offers futures and options on futures trading through the CME Globex platform, fixed income trading via BrokerTec and foreign exchange trading on the EBS platform. In addition, it operates one of the world's leading central counterparty clearing providers, CME Clearing.
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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
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SOURCE CME Group
