Livestock sector optimism fuels a modest rise in farmer sentiment in October

Rhea-AI Summary

Purdue University/CME Group Ag Economy Barometer (CME) rose 3 points in October to 129, driven by an Index of Current Conditions increase of 8 points to 130, while the Index of Future Expectations was essentially flat at 129.

The Farm Financial Performance Index fell to 78 (down 10 points month-to-month and 31 points since May). The Farm Capital Investment Index climbed 9 points to 62, led by livestock producers. Short-term farmland value expectations rose 7 points to 113, with 30% expecting values to rise next year (up from 24%).

Survey responses show crop producers trimming inputs: 29% plan to reduce phosphorus and 16% plan to reduce nitrogen for 2026. If the USDA offered a supplemental payment, 53% said they would pay down debt and 25% would bolster working capital.

Positive

• Barometer +3 points to 129 in October
• Current Conditions +8 points to 130
• Farm Capital Investment Index +9 points to 62
• Farmland Expectations +7 points to 113; 30% expect rises

Negative

• Farm Financial Performance Index fell to 78 (−10 pts vs Sept)
• Farm Financial Performance −31 points since May (109 to 78)
• Input cuts planned: 29% reduce phosphorus, 16% reduce nitrogen
• Debt pressure: 53% would use a USDA payment to pay down debt

News Market Reaction

+1.40%

1 alert

+1.40% News Effect

On the day this news was published, CME gained 1.40%, reflecting a mild positive market reaction.

Data tracked by StockTitan Argus on the day of publication.

WEST LAFAYETTE, Ind., Nov. 4, 2025 /PRNewswire/ -- U.S. farmer sentiment edged slightly higher in October, with the Purdue University/CME Group Ag Economy Barometer rising 3 points to a reading of 129. The increase was fueled primarily by a rise in the Index of Current Conditions, which climbed 8 points to 130, while the Index of Future Expectations was virtually unchanged at 129, just 1 point higher than in September. Farmers' appraisals of current conditions highlight a "tale of two economies": Livestock producers remain highly optimistic about their farm conditions, partly supported by record-high profitability in the beef sector, while crop producers report a more pessimistic view of the current situation on their farms due to low profit margins across major crop enterprises. The barometer survey took place Oct. 13-17.

The Farm Financial Performance Index dropped to 78 in October, 10 points lower than in September, reflecting a sharp decline in farmers' financial performance expectations over the past few months. In May, the index stood at 109, 31 points above the October reading, before steadily falling through the spring and summer. Similar to the Index of Current Conditions, there continues to be a disparity between crop and livestock producers: Crop farmers expect their financial performance to fall well below that of a year ago, while livestock producers anticipate results similar to the previous year. Despite the overall decline in financial expectations, the Farm Capital Investment Index increased by 9 points to 62, boosted once again by optimism among livestock producers.

In previous barometer surveys, most producers said they expect the U.S. Department of Agriculture to provide compensation for weak commodity prices, similar to the 2019 Market Facilitation Program. This month, respondents were asked how they would use a potential supplementary payment from the USDA on their farms. More than half (53%) said they would use it to pay down debt, while one-fourth (25%) said they would strengthen their farm's working capital. Fewer producers said they would invest in farm machinery (12%) or cover family living expenses (11%).

The Short-Term Farmland Value Expectations Index rose 7 points in October to 113, following four months of declines. The shift in sentiment reflects more producers anticipating farmland values to increase rather than hold steady, reversing September's trend. This month, 30% of respondents said they expect farmland values to rise over the next year, up from 24% in September. The percentage expecting values to fall remained essentially unchanged at 17%, compared to 18% the previous month.

"U.S. farmers are adjusting to ongoing economic pressures in different ways," said Michael Langemeier, the barometer's principal investigator and director of Purdue's Center for Commercial Agriculture. "Livestock producers are seeing strong returns and remain optimistic, while many crop producers are contemplating management changes for 2026 to help cope with tighter margins."

To learn more about how crop producers will respond to weak operating margins, the October survey asked respondents who planted corn in 2025 about any crop production management changes they plan to make in 2026 in response to low corn prices. Nearly one-third (30%) said they do not plan to make any changes, while 29% said they plan to reduce phosphorus applications. Twenty-seven percent said they intend to adopt lower-cost seed traits or varieties, 16% plan to reduce nitrogen applications, while just 11% said they would lower corn seeding rates in 2026.

Policy uncertainty continues to influence farmer sentiment. In October, 58% of producers said they expect increased use of tariffs by the U.S. to strengthen the agricultural economy, up from September but still below the 70% reported in April and May. Meanwhile, 16% of respondents said they were uncertain about the impact of tariff policies on the agricultural economy, double that of both April and May. Despite this uncertainty, roughly 70% of producers said they believe the U.S. is headed 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 (www.cmegroup.com) 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, cryptocurrencies, 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 106,000 students study at Purdue across multiple campuses, locations and modalities, including more than 57,000 at our main campus locations 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 integrated, comprehensive Indianapolis 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

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SOURCE CME Group

FAQ

What was the Purdue/CME Ag Economy Barometer reading for October 2025 (CME)?

The barometer read 129 in October 2025, up 3 points from September.

How did the Index of Current Conditions change in October 2025 for CME?

The Index of Current Conditions rose 8 points to 130 in October 2025.

What happened to farmers' financial expectations in October 2025 (CME)?

The Farm Financial Performance Index dropped to 78, 10 points below September and 31 points below May.

How did October 2025 survey responses signal crop producers will react to low corn prices (CME)?

For 2026, 29% plan to reduce phosphorus, 16% plan to reduce nitrogen, and 27% plan lower-cost seed traits.

What share of producers would use a USDA supplemental payment to pay down debt (CME)?

53% of respondents said they would use a potential USDA supplementary payment to pay down debt.

What change occurred in short-term farmland value expectations in October 2025 (CME)?

The Short-Term Farmland Value Expectations Index rose 7 points to 113, with 30% expecting values to rise over the next year.