Mid-Year Economic Outlook #3: Farmer Sentiment of the Ag Economy

Farmer Sentiment of the Ag Economy in July Remained Positive Despite Input Costs and Low Prices

The Purdue/CME ag economy barometer is used to measure the health of the U.S. agricultural economy through a nationwide monthly survey of the sentiment of agricultural producers and agribusiness leaders. Much of the Ag Economy Barometer are reported in the form of indices, with index numbers greater than 100 indicating positive farmer sentiment of a better ag economy and conversely lower than 100 indicating a negative sentiment.  At the beginning of 2025 the Ag Economy Barometer indicated relatively positive expectations of the agricultural economy. As of the July report issued August 5th, indices for current and future expectations have shown some volatility but are still holding positive and much higher than the negative value at this time the previous year.

Looking forward, weaker income prospects and lower future expectations have pushed the Future Expectations Index value down 23 points since the four-year high (158) peak in May but remained positive (greater than 100) and well above the negative expectations reflected in July of last year.

Conversely to the above indices, the Farm Financial Performance Index fell 14 points to 90 points in July, moving from a positive to negative outlook, indicating that more farmers are expecting a weaker rather than stronger farm income for this year’s harvest compared to last years.

The apparently negative sentiment reflected in the Financial Performance Index is hard to balance against the more positive outlooks above. Perhaps this is a directional indicator. It will be interesting to see if the positive outlook reflected in the Current and Future Expectations above remain following the recent USDA harvest yield and acreage report, which forecast record yields and the largest ever corn crop.