Farmers Express Growing Concerns Over Rising Input Costs and Economic Outlook
In a troubling trend that reflects ongoing economic challenges, farmers across the United States have voiced increasing concerns regarding their financial stability, as revealed by the latest Purdue University/CME Group Ag Economy Barometer. The barometer’s results for June indicated a worrying 6-point decline in farmer sentiment, settling at 113. This shift is further underscored by an 18-month low in the Current Conditions Index, now at 102, coupled with a decrease in the Future Expectations Index by 7 points.
A significant factor contributing to this decline in optimism among producers is the steep rise in input costs. Almost half of the surveyed farmers, specifically 47%, expressed that high input costs are the primary hurdle they face in their agricultural practices. Following this concern, 23% of respondents pointed to low prices for crops and livestock as another significant challenge. Furthermore, the survey indicated that 42% feel that these high costs are constraining their ability to improve their financial standing in the current year.
Conducted between June 15 and June 19, this survey gathered insights from 400 farmers nationwide, providing a comprehensive view of the prevailing economic sentiment in the agricultural sector. The data paints a somber picture; a mere 12% of those surveyed reported that their financial situation has improved compared to the previous year, and only 22% believe that their circumstances will enhance over the next year. Reflecting this cautious mood, the Farm Capital Investment Index has plummeted to 40, marking its lowest point since September 2024.
When probed about the specific factors hindering improvement in their finances, respondents identified high input costs as the leading constraint once again. Lower output prices ranked second, with 17% attributing their difficulties to this issue. Other concerns included weather risks (14%), uncertainty surrounding policies (11%), labor and equipment difficulties (9%), and debt pressure (8%).
"Despite the ongoing challenges related to input costs, producers are still making decisions within a broader context that includes technological advancements, trade expectations, and long-term outlooks on land value," explained Michael Langemeier, the principal investigator of the barometer and director at Purdue's Center for Commercial Agriculture.
Additionally, the survey ventured into the perceived impact of artificial intelligence (AI) and data-driven tools within the agricultural domain. A significant share of respondents considered the benefits of such technologies, with 23% highlighting increased production as the most pivotal advantage. However, more than half (52%) did not perceive any meaningful advantages, showcasing a prevalent skepticism concerning the practical application of these innovations.
The sentiment regarding AI was further emphasized with 63% of farmers stating that AI-generated recommendations might often be challenging to implement. Conversely, 43% remain optimistic about agricultural exports in the coming five years, reflecting strong support for free trade practices. While 9% foresee a decline in agricultural exports, the majority remain hopeful for growth in this sector, with 85% affirming that free trade generally benefits agriculture alongside most sectors.
In stark contrast to these positive trade expectations, longer-term views within the agricultural sector have weakened. Those anticipating favorable conditions in the next five years decreased to 32%, a drop of 17 percentage points from the previous year. This sentiment varied significantly between sectors; 68% of livestock producers expect positive outcomes compared to only 25% of crop producers.
On the topic of farmland values, June marked a decline in short-term expectations with the index slipping from 130 in May to 124. However, long-term forecasts remained robust, increasing to 166, tied for the highest on record. Factors influencing these opinions included alternative investments and net farm income amidst inflation concerns.
Since mid-2025, farmers have been asked whether they believe the U.S. is heading in the right direction. After a six-month average of 71%, only 52% reported a positive outlook in May and slightly increased to 53% in June.
The Purdue University Center for Commercial Agriculture, established in 2011, is dedicated to crafting professional development programs aimed at addressing contemporary agricultural management needs. As a fixture within Purdue's Department of Agricultural Economics, it continues to facilitate research and educational initiatives geared towards tackling the complexities of today's agricultural landscape.
Meanwhile, CME Group, recognized globally as a leader in derivatives marketplaces, emphasizes the importance of risk management and market opportunities, offering a range of products that span agricultural, energy, and financial sectors. Their commitment to innovation in trading solutions ensures that commodity markets continue to evolve alongside producer needs.
As the agricultural sector navigates these hurdles amid fluctuating sentiments, ongoing research and dialogue will be essential in fostering a resilient and adaptable farming community for the future.
A significant factor contributing to this decline in optimism among producers is the steep rise in input costs. Almost half of the surveyed farmers, specifically 47%, expressed that high input costs are the primary hurdle they face in their agricultural practices. Following this concern, 23% of respondents pointed to low prices for crops and livestock as another significant challenge. Furthermore, the survey indicated that 42% feel that these high costs are constraining their ability to improve their financial standing in the current year.
Conducted between June 15 and June 19, this survey gathered insights from 400 farmers nationwide, providing a comprehensive view of the prevailing economic sentiment in the agricultural sector. The data paints a somber picture; a mere 12% of those surveyed reported that their financial situation has improved compared to the previous year, and only 22% believe that their circumstances will enhance over the next year. Reflecting this cautious mood, the Farm Capital Investment Index has plummeted to 40, marking its lowest point since September 2024.
When probed about the specific factors hindering improvement in their finances, respondents identified high input costs as the leading constraint once again. Lower output prices ranked second, with 17% attributing their difficulties to this issue. Other concerns included weather risks (14%), uncertainty surrounding policies (11%), labor and equipment difficulties (9%), and debt pressure (8%).
"Despite the ongoing challenges related to input costs, producers are still making decisions within a broader context that includes technological advancements, trade expectations, and long-term outlooks on land value," explained Michael Langemeier, the principal investigator of the barometer and director at Purdue's Center for Commercial Agriculture.
Additionally, the survey ventured into the perceived impact of artificial intelligence (AI) and data-driven tools within the agricultural domain. A significant share of respondents considered the benefits of such technologies, with 23% highlighting increased production as the most pivotal advantage. However, more than half (52%) did not perceive any meaningful advantages, showcasing a prevalent skepticism concerning the practical application of these innovations.
The sentiment regarding AI was further emphasized with 63% of farmers stating that AI-generated recommendations might often be challenging to implement. Conversely, 43% remain optimistic about agricultural exports in the coming five years, reflecting strong support for free trade practices. While 9% foresee a decline in agricultural exports, the majority remain hopeful for growth in this sector, with 85% affirming that free trade generally benefits agriculture alongside most sectors.
In stark contrast to these positive trade expectations, longer-term views within the agricultural sector have weakened. Those anticipating favorable conditions in the next five years decreased to 32%, a drop of 17 percentage points from the previous year. This sentiment varied significantly between sectors; 68% of livestock producers expect positive outcomes compared to only 25% of crop producers.
On the topic of farmland values, June marked a decline in short-term expectations with the index slipping from 130 in May to 124. However, long-term forecasts remained robust, increasing to 166, tied for the highest on record. Factors influencing these opinions included alternative investments and net farm income amidst inflation concerns.
Since mid-2025, farmers have been asked whether they believe the U.S. is heading in the right direction. After a six-month average of 71%, only 52% reported a positive outlook in May and slightly increased to 53% in June.
The Purdue University Center for Commercial Agriculture, established in 2011, is dedicated to crafting professional development programs aimed at addressing contemporary agricultural management needs. As a fixture within Purdue's Department of Agricultural Economics, it continues to facilitate research and educational initiatives geared towards tackling the complexities of today's agricultural landscape.
Meanwhile, CME Group, recognized globally as a leader in derivatives marketplaces, emphasizes the importance of risk management and market opportunities, offering a range of products that span agricultural, energy, and financial sectors. Their commitment to innovation in trading solutions ensures that commodity markets continue to evolve alongside producer needs.
As the agricultural sector navigates these hurdles amid fluctuating sentiments, ongoing research and dialogue will be essential in fostering a resilient and adaptable farming community for the future.
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