Key facts
- Farmer sentiment reached its highest level since May 2021 in November, climbing to 145 on the Purdue University/CME Group Ag Economy Barometer.
- The November sentiment surge was driven by a 37-point increase in the Future Expectations Index and an 18-point rise in the Current Conditions Index.
- Following the US election, farmers' expectations for a more favorable regulatory environment shifted dramatically, with 55% predicting less restrictive regulations.
- US farmer sentiment continued to rise in February, reaching 152, primarily due to a 28-point jump in the Current Conditions Index.
- The Farm Capital Investment Index reached its most positive level since May 2021 in February, increasing 11 points to 59.
- Fifty percent of farmers in February indicated they have no plans to grow their operations or plan to exit/retire, a slight decrease from the previous year.
Farmer sentiment in the United States has shown a significant upward trend, reaching its highest levels since May 2021. The Purdue University/CME Group Ag Economy Barometer climbed to 145 in November, a 30-point increase, driven by substantial gains in both current conditions and future expectations. This optimism is largely attributed to the post-election environment, with farmers anticipating a more favorable regulatory and tax landscape for agriculture.
In November, 33% of producers expected their farm's financial performance to improve over the next year, up from 19% in October. Similarly, 34% anticipated good financial times for the U.S. agricultural sector in the next 12 months, more than doubling October's figure. Over half of respondents predicted widespread prosperity for U.S. agriculture in five years. Farmers' investment plans also reflected this confidence, with 22% reporting it as a good time for large capital investments, compared to 15% in October. The Farm Capital Investment Index rose 13 points to 55, its highest since May 2021.
Views on environmental regulations saw a sharp reversal following the election. In October, 41% expected stricter regulations, but in November, only 9% anticipated stricter rules, while 55% predicted a less restrictive environment. Tax expectations also shifted, with more farmers anticipating unchanged income and estate tax rates compared to responses after the 2020 election.
Farmer sentiment continued its upward trajectory in February, with the Ag Economy Barometer rising 11 points to 152. This increase was primarily fueled by a 28-point jump in the Current Conditions Index to 137, a significant rebound from late summer and early fall 2024. The Future Expectations Index saw a more modest rise of 3 points to 159. Factors contributing to this sentiment include a recovery in crop prices, expectations for disaster payments, and strength in the livestock sector.
The Farm Capital Investment Index increased 11 points to 59 in February, its highest since May 2021, driven by improved current conditions. The Farm Financial Performance Index held steady at 110. The Short-Term Farmland Value Expectations Index modestly increased to 118. While farmers are less optimistic about farmland values than in 2021-2022, sentiment has improved from late 2024. In terms of growth expectations, 19% of respondents anticipate 10-15% or more annual growth for their farm operations, more than double last year's figure.