Farmer sentiment weakens, but farmers believe U.S. policy headed in right direction

Rhea-AI Summary

The Purdue University/CME Group Ag Economy Barometer showed declining farmer sentiment in July 2025, falling 11 points to 135 from June. The decline was driven by weaker perceptions of both current conditions and future expectations, with the Current Conditions Index dropping 17 points to 127 and the Future Expectations Index declining 7 points to 139.

The Farm Financial Performance Index fell 14 points to 90, reflecting concerns about weaker income prospects for 2025. Crop prices have declined notably, with eastern Corn Belt seeing July bids for fall harvest delivery of corn and soybeans down 7% and 3% respectively. Despite these challenges, 74% of farmers believe U.S. policy is headed in the right direction, and 43% expect increased agricultural exports in the next five years.

Positive

• None.

Negative

• Ag Economy Barometer declined 11 points to 135, showing weakening farmer sentiment
• Farm Financial Performance Index dropped 14 points to 90, indicating lower income expectations
• Corn and soybean prices fell 7% and 3% respectively in eastern Corn Belt
• Short-Term Farmland Value Expectations Index dropped 5 points

News Market Reaction

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Data tracked by StockTitan Argus on the day of publication.

WEST LAFAYETTE, Ind., Aug. 5, 2025 /PRNewswire/ -- Farmer sentiment continues to weaken, as the Purdue University/CME Group Ag Economy Barometer declined again in July. The barometer fell 11 points to 135 from June, a reading that resulted from U.S. farmers' weaker perceptions of both current conditions and future expectations. The July Current Conditions Index dropped 17 points to 127 from last month, while the Future Expectations Index posted a smaller decline of 7 points to 139. Driving the weaker income prospects for 2025 were farmers' assessment of current conditions. Despite lower scores on the three principal farmer sentiment indices, sentiment remains notably higher than at the same time a year ago. Almost three-fourths of July's survey respondents reported that U.S. policy is headed "in the right direction." This month's barometer survey took place from July 7-11.

The Farm Financial Performance Index reflected concerns about weak income prospects for 2025, falling 14 points from June to 90. This decline indicates that more farmers expect less income in 2025 compared to 2024. Weakening crop prices are eroding prospective income. The eastern Corn Belt, for example, has seen July bids for the fall harvest delivery of corn and soybeans fall 7% and 3%, respectively, compared to a month earlier. The decline in farmers' income prospects contributed to a 7-point drop in July's Farm Capital Investment Index to a reading of 53.

The Short-Term Farmland Value Expectations Index also softened in the wake of the weaker income outlook for next year, dropping 5 points from June. The latest reading of 115 also leaves the index 3 points lower than last year and 10 points below two years ago. The weakness in the farmland index stemmed from a small shift among respondents expecting rising instead of weakening values during the coming year. The percentage who expected values to hold steady, meanwhile, rose 1 point to 57%. 

The July survey coincided with next year's farmland leasing discussions between farms and landowners. A question regarding crop producers' expectations for farmland cash rental rates revealed crop producers' expectations for 2026 rates. Even with weakening crop income prospects, 73% of respondents said they expect cash rental rates to remain mostly unchanged. Only 11% of crop producers indicated that they foresee a rental-rate decline.

Producers' expectations of the farm income safety net provided by U.S. farm programs may have helped support both farmland values and farmland cash rental rates. In the July survey, 31% of respondents said they expected a stronger safety net in the 2025 farm bill than the one in 2024. 

More optimism prevailed among U.S. farmers about future agricultural trade prospects than in June. In July, 43% of respondents reported expectations for an increase in agricultural exports in the next five years, 2 points higher than the previous month. Similarly, fewer producers said they look for declining exports, dropping to 13% from 16%. Of those responding to a related question in July, 64% said they considered it likely that the next five years would open new foreign export markets to American agricultural goods.

Another question that gauged U.S. farmers' outlook regarding trade and policy asked, "Would you say things in the U.S. today are generally headed in the right direction or on the wrong track?" The U.S. is "headed in the right direction," according to 74% of respondents.

"Producers held dim views of current conditions and future expectations, which weakened the sentiment of U.S. farmers in July," said Michael Langemeier, the barometer's principal investigator and director of Purdue's Center for Commercial Agriculture. "Still, producers showed somewhat more optimism about U.S. agricultural trade prospects in July, with the majority assessing that the U.S. policy is heading in the right direction."

About the Purdue University Center for Commercial Agriculture

The Center for Commercial Agriculture was founded in 2011 to provide professional development and educational programs for farmers. Housed within Purdue University's Department of Agricultural Economics, the center's faculty and staff develop and execute research and educational programs that address the different needs of managing in today's business environment.

About CME Group

As the world's leading derivatives marketplace, CME Group enables clients to trade futures, options, cash and OTC markets, optimize portfolios, and analyze data — empowering market participants worldwide to efficiently manage risk and capture opportunities. CME Group exchanges offer the widest range of global benchmark products across all major asset classes based on interest rates, equity indexes, foreign exchange, energy, agricultural products and metals. The company offers futures and options on futures trading through the CME Globex platform, fixed income trading via BrokerTec and foreign exchange trading on the EBS platform. In addition, it operates one of the world's leading central counterparty clearing providers, CME Clearing.

CME Group, the Globe logo, CME, Chicago Mercantile Exchange, Globex, and E-mini are trademarks of Chicago Mercantile Exchange Inc. CBOT and Chicago Board of Trade are trademarks of Board of Trade of the City of Chicago, Inc. NYMEX, New York Mercantile Exchange and ClearPort are trademarks of New York Mercantile Exchange, Inc. COMEX is a trademark of Commodity Exchange, Inc. BrokerTec is a trademark of BrokerTec Americas LLC and EBS is a trademark of EBS Group LTD. The S&P 500 Index is a product of S&P Dow Jones Indices LLC ("S&P DJI"). "S&P®", "S&P 500®", "SPY®", "SPX®", US 500 and The 500 are trademarks of Standard & Poor's Financial Services LLC; Dow Jones®, DJIA® and Dow Jones Industrial Average are service and/or trademarks of Dow Jones Trademark Holdings LLC. These trademarks have been licensed for use by Chicago Mercantile Exchange Inc. Futures contracts based on the S&P 500 Index are not sponsored, endorsed, marketed, or promoted by S&P DJI, and S&P DJI makes no representation regarding the advisability of investing in such products. All other trademarks are the property of their respective owners.

About Purdue University

Purdue University is a public research university leading with excellence at scale. Ranked among top 10 public universities in the United States, Purdue discovers, disseminates and deploys knowledge with a quality and at a scale second to none. More than 107,000 students study at Purdue across multiple campuses, locations and modalities, including more than 58,000 at our main campus in West Lafayette and Indianapolis. Committed to affordability and accessibility, Purdue's main campus has frozen tuition 14 years in a row. See how Purdue never stops in the persistent pursuit of the next giant leap — including its comprehensive urban expansion, the Mitch Daniels School of Business, Purdue Computes and the One Health initiative — at https://www.purdue.edu/president/strategic-initiatives.

Sources and Notes block:
Source: Michael Langemeier, mlangeme@purdue.edu, 765-494-9557

Author: Steve Koppes

Image caption: Farmer sentiment weakens, but farmers say the U.S. is headed in the right direction. (Purdue University/CME Group Ag Economy Barometer/James Mintert)

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SOURCE CME Group

FAQ

What is the latest Purdue University/CME Group Ag Economy Barometer reading for July 2025?

The Ag Economy Barometer declined 11 points to 135 in July 2025, with the Current Conditions Index at 127 and Future Expectations Index at 139.

How much did crop prices decline in the eastern Corn Belt according to July 2025 data?

July bids for fall harvest delivery showed corn prices down 7% and soybean prices down 3% compared to the previous month.

What percentage of farmers expect cash rental rates to change in 2026?

73% of respondents expect cash rental rates to remain unchanged, while only 11% foresee a decline in rental rates.

How do farmers view U.S. agricultural export prospects for the next five years?

43% of farmers expect increased agricultural exports in the next five years, and 64% believe new foreign export markets will open to American agricultural goods.

What is the current Farm Financial Performance Index and what does it indicate?

The Farm Financial Performance Index fell 14 points to 90, indicating that more farmers expect lower income in 2025 compared to 2024.