By Jamie Martin
Farmer sentiment in the U.S. saw a strong boost in May, reaching its highest level in four years. The Purdue University/CME Group Ag Economy Barometer rose 10 points to 158, showing increased confidence among producers about farm conditions and the future of agriculture.
The Index of Current Conditions rose to 146, while the Index of Future Expectations climbed to 164. The improved outlook was mainly due to more positive views on agricultural exports and a less negative perception of tariffs on farm income.
Optimism extended to farm finances. The Farm Financial Performance Index increased by 8 points to 109, indicating that farmers expect a stronger income year in 2025.
However, the Farm Capital Investment Index dropped 6 points to 55, suggesting fewer producers believe it’s a good time to invest.
Farmland values also saw improved expectations. The Short-Term Farmland Value Expectations Index rose 14 points to 124, with 37% of producers expecting prices to rise—up from 25% in April.
Expectations for U.S. agricultural exports were notably higher, with 52% predicting growth over the next five years. Just 12% expected a decline. This is the most optimistic export outlook since November 2020.
The May survey also included questions on labor. About 51% of respondents said they hire nonfamily labor. Of those, 26% anticipate hiring difficulties due to immigration policy, with 10% expecting “a lot of difficulty” and 16% predicting “some difficulty.”
“Costs have inflated a lot, and our commodity price is down about 40% in the last three years,” said one farmer. “So, we're looking at higher cost and lower sales price… and that is a very bad combination when you add a trade war to it.”
Overall, producers remain cautiously optimistic, with gains in sentiment tempered by investment caution and labour concerns.
Photo Credit: purdue-university
Categories: National