U.S. farmers began 2025 with an optimistic outlook, as the January Purdue University/CME Group Ag Economy Barometer rose 5 points from the previous month to a reading of 141. This increase was driven by a 9-point growth in the Current Conditions Index and a 3-point rise in the Future Expectations Index. The improvement in sentiment was linked to higher crop prices between December and mid-January and fewer producers citing crop and livestock prices as a top concern. For instance, Eastern Corn Belt prices for near-term delivery of corn and soybeans rose by 9% and 5%, respectively, during that period. While farmers’ views of current conditions improved, optimism about the future remained even stronger, with the Future Expectations Index exceeding the Current Conditions Index by 47 points.
The Farm Financial Performance Index climbed 13 points in January, reflecting a similar rise in the Current Conditions Index and indicating that producers, on average, anticipate 2025 will be a more robust financial year than 2024.
Meanwhile, the Farm Capital Investment Index remained steady at a reading of 48, unchanged from December. Despite no change, the investment index remains significantly higher than last summer’s low of 31 and represents the second-highest reading of the past three years. Producers’ optimism about the future appears to support the stronger investment index.
Michael Langemeier, the barometer’s principal investigator and Director of Purdue University’s Center for Commercial Agriculture says, “Recent improvements in crop and livestock prices have provided a boost to farmers’ current sentiment. Although farmers are optimistic about the future, there are some clouds on the horizon. For example, more farmers reported in January that they are worried about the future of agricultural trade, with 40% of respondents saying they think a trade war is either likely or very likely.”
The Short-Term Farmland Value Expectations Index rose 5 points in January to a reading of 115, returning to its November level. Meanwhile, the Long-Term Farmland Value Expectations Index, which gauges expectations for the next five years, declined 5 points to 150. Despite the dip, the long-term index remains 8 points above its 12-month low recorded last August.
EDITOR’S TAKE:
A pretty good survey result by most standards. Survey participants were not only optimistic about current conditions but were really in a positive mood when it came to future expectations. They see 2025 as being a “more robust financial year” than last year. Although the Farm Capital Investment Index remained steady, it’s likely because farmers/ranchers are also cautious by nature. When they truly realize that 2025 is going to be a much better year, look for that index to climb as well. You might consider hosting a farmer appreciation event during AgRally on March 18, 2025. That also happens to be National Ag Day. We are encouraging all CAD members to do something special for farmers/ranchers to help celebrate their contribution to our country and our well-being. Whether it is a breakfast or luncheon or a full-blown ag event at your dealership – please do something to celebrate this special day!
