Farmer confidence grows with improving U.S. current conditions

U.S. farmer sentiment continued its upward trend in February, as the Purdue University/CME Group Ag Economy Barometer rose 11 points from the previous month to a reading of 152. The boost was primarily driven by the stronger sentiment among producers, with the Current Conditions Index climbing 28 points to 137 — marking a rebound from its low of 76 in late summer and early fall 2024.

In contrast, the Future Expectations Index saw only a modest increase, rising 3 points to 159. The recent upswing in sentiment reflects a combination of factors, including a sharp recovery in crop prices, expectations for disaster payments authorized by Congress, and continued strength in the U.S. livestock sector. Despite the notable improvement in current conditions, farmers remain more optimistic about the future, as the Future Expectations Index continues to outpace the Current Conditions Index by 22 points. This month’s survey was conducted between Feb. 10-14.

Farm capital investment index reaches highest level since 2021

The Farm Capital Investment Index jumped 11 points in February to a reading of 59, reaching its most positive level since May 2021. This month’s increase also placed the index 4 points above its November post-election reading. Compared to previous months, where future expectations primarily led investment sentiment, February’s increase was driven by farmers’ improved assessment of current conditions. Meanwhile, the Farm Financial Performance Index held steady at 110, nearly unchanged from January’s reading of 111. Although the index saw little movement this month, it remains well above last fall’s low of 68.

The Short-Term Farmland Value Expectations Index modestly increased in February to 118, a 3-point increase from January and 8 points higher than December. This month’s reading was also 3 points above its level from a year ago and nearly the same as two years ago. While producers remain less optimistic about farmland values than they were during the winters of 2021 and 2022, sentiment has improved compared to the more cautious outlook seen in late summer and early fall 2024.

“While sentiment about the future remains strong, as reflected in the Future Expectations Index, there’s growing interest in making larger investments in farm operations, suggesting that farmers are feeling more confident about their ability to grow despite the challenges ahead,” said Michael Langemeier, the barometer’s principal investigator and director of Purdue University’s Center for Commercial Agriculture.

Each February, the barometer survey asks producers about their five-year growth expectations for their farm operations. In the 2025 survey, 50 percent of respondents indicated they either have “no plans to grow” (37 percent) or “plan to exit or retire” (13 percent), nearly unchanged from 52 percent in 2024. Since 2016, the share of producers in these two categories has ranged from a low of 43 percent  in 2016 to a high of 61 percent in 2022.

This year’s biggest shift came from a decline in the percentage of producers expecting slow growth (less than 5 percent) and a corresponding increase in those anticipating higher growth rates. Nineteen percent of respondents noted expectations for their farm to grow by 10 percent to 15 percent or more annually — more than double the 9 percent who projected similar growth last year.

Policies impacting agriculture are top of mind for U.S. farmers. Sixty-two percent of survey respondents in February indicated that passing a new farm bill in 2025 is either “important” (25 percent) or “very important” (47 percent). When asked about the most crucial policies for their farm over the next five years, 44 percent cited “trade policy” as their top concern, followed by “crop insurance program” at 18 percent. Concerns about trade policy were also evident when producers were asked about the likelihood of a “trade war” that results in a significant drop in U.S. agricultural exports. Forty-eight percent of farmers in this month’s survey believe a trade war is either “likely” (29 percent) or “very likely” (19 percent).

“While the current outlook for U.S. agriculture has improved, farmers are closely watching trade policy and the potential for a new farm bill, both of which are key factors shaping their long-term expectations,” said Langemeier. “These ongoing policy concerns will likely play a critical role in shaping producer sentiment in the months ahead.”