#USA #CME Group #Purdue University #West Lafayette #Ag Economy

Farmer Sentiment Reaches New Heights

In May 2025, farmers across the United States expressed a significant boost in confidence as farmer sentiment climbed to the highest level since May 2021. According to the recent Purdue University/CME Group Ag Economy Barometer, sentiment improved for the second consecutive month, rising by 10 points to reach a score of 158, up from 148 in April.

This increase can be attributed to positive changes in both the current conditions and expectations for the future. Specifically, the Index of Current Conditions witnessed a 5-point rise to 146, while the Index of Future Expectations surged by 12 points to 164. Farmers are showcasing a more optimistic outlook primarily due to favorable projections regarding U.S. agricultural exports and a notably less pessimistic view on the impact of tariffs on farm income in the coming years.

Key Drivers of Farmer Sentiment

The barometer survey conducted between May 12 and 16 revealed that the Farm Financial Performance Index also saw an uptick, climbing 8 points to reach a total of 109. This suggests that producers anticipate 2025 to be a stronger income year compared to 2024. However, this sense of optimism was tempered by a decline in the Farm Capital Investment Index, which fell 6 points to 55. Many producers now doubt that this is a good time to invest in their operations, even though current readings still exceed those from May over the last three years, which were lower at 35 to 37.

On the upside, the Short-Term Farmland Value Expectations Index skyrocketed by 14 points from April to a reading of 124—this is the highest score recorded since March 2024. A growing number of respondents, specifically 37%, foresee an increase in farmland values, marking an increase from 25% in April. Conversely, those predicting stability in land values fell from 60% to 50%.

Trade Optimism and Labor Concerns

A pivotal factor behind the rise in farmer sentiment is the improved view regarding long-term U.S. agricultural trade prospects. The survey indicated that 52% of producers expect an increase in agricultural exports over the next five years, a remarkable rise from just 33% in April. Notably, the proportion of producers anticipating a decline in exports dropped from 24% to 12% within the same timeframe.

Responses to a question posed regarding the benefits of free trade illustrated shifting opinions. In earlier surveys conducted in fall 2020, 49% of participants expressed strong agreement with the notion that free trade benefits agriculture and American industries. However, this number dropped to only 28% by May 2025.

In addition to optimism about trade, the survey also shed light on labor challenges faced by producers, particularly regarding hiring nonfamily labor, with 51% of respondents indicating that they typically hire such workers. One quarter of these producers expressed concerns about difficulties in hiring labor due to recent immigration policy changes. Specifically, 10% anticipate