Rising Input Costs Weigh on Farmers' Sentiment Amid Economic Uncertainty

Declining Farmer Sentiment Amid Rising Costs

In May 2026, farmer sentiment took a slight downturn as revealed by the Purdue University/CME Group Ag Economy Barometer. This barometer saw a drop from 121 in April to 119 in May, instigating worries amongst farmers due to surging input costs and increasing financial pressures.

The Financial Landscape

The decrease in sentiment was evident, with a staggering 51% of respondents listing high input costs as their primary concern, an all-time record within the survey. Surprisingly, only 14% of farmers reported a better financial position than the previous year, while merely 22% expected improvements in the coming year. The Farm Capital Investment Index also fell by 3 points to reach 41, a sign of the hesitation to pursue major investments.

Michael Langemeier, principal investigator of the barometer and director at Purdue's Center for Commercial Agriculture, noted, "The persistence of high input costs is particularly challenging in an environment where many producers are already operating with tighter margins. When opportunities to elevate their financial situation are lackluster despite effective management, it deeply influences their perceptions of current conditions and future investment plans."

Projected Income and Break-Even Prices

Additional insights were shared in the survey regarding net farm income projections and anticipated corn break-even prices for 2026. Approximately two-thirds of the respondents expressed concerns about reduced net income in the next year. Furthermore, nearly half of those who planted corn in 2025 forecasted that break-even prices could rise by as much as 6%, and 30% expect increases of 10% or more.

Labor Availability and Technology Utilization

The survey also delved into labor dynamics on farms, with around 39% of participants employing non-family workers. Out of this group, 44% reported facing difficulties in hiring this year. When examining the potential impact of artificial intelligence (AI) tools on labor and equipment situations, 59% believed that AI would not enhance their current conditions, while 37% felt it could help slightly, and only 4% thought it would provide substantial support.

Farmland Expectations

Despite the overall sentiment reflecting ongoing challenges, expectations for farmland value showed resilience. The Short-Term Farmland Value Expectations Index rose from 121 in April to 130 in May, and the long-term index also observed an increase from 155 to 160. Farmers identified three significant influencing factors on farmland values: alternative investments, interest rates, and net farm income.