Farmer Sentiment Weakens, But Farmers Say U.S. Headed in Right Direction

The Purdue University-CME Group Ag Economy Barometer index declined for the second month in a row. The July index fell 11 points below June’s reading and was fueled by U.S. farmers’ weaker perceptions regarding both current conditions and their expectations for the future. The July Current Conditions Index fell 17 points while the Future Expectations Index declined 7 points, both compared to a month earlier. Weaker income prospects in 2025 were largely responsible for farmers’ weaker appraisal of current conditions. Although all three principal farmer sentiment indices were lower in July than a month earlier, producer sentiment remains much more positive than at this time last year, with nearly three-quarters of July’s survey respondents reporting that the U.S. is headed “in the right direction.” The July barometer survey took place from July 7-11, 2025.

Concerns about weak income prospects in 2025 were evident in the July survey as the Farm Financial Performance Index fell 14 points compared to a month earlier. This month’s decline left the index at a reading of 90, indicating that more farmers expect weaker rather than stronger income in 2025 compared to 2024. Weakening crop prices are eroding income prospects. For example, in the Eastern Corn Belt, bids for fall harvest delivery of corn and soybeans were 7% and 3% lower during the July survey week, respectively, than just 4 weeks earlier. In turn, the decline in farmers’ income prospects helped push the Farm Capital Investment Index down 7 points in July to a reading of 53.

Unsurprisingly, a weaker income outlook led to a softer outlook for farmland values in the upcoming year. The Short-Term Farmland Value Expectations Index dipped 5 points below a month earlier. This month’s reading of 115 also left the index 3 points lower than a year earlier and 10 points below two years ago. The farmland index’s weakness was attributable to a small shift among respondents away from expecting values to rise to looking for weakening values in the upcoming year, while the percentage expecting values to hold steady rose just one point to 57%. With farmland leasing discussions for next year underway between farmers and landowners, this month’s survey included a question regarding crop producers’ expectations for farmland cash rental rates in 2026. Despite weakening crop income prospects, nearly three-fourths (73%) of respondents said they expect cash rental rates in 2026 to remain about the same, with just 11% of crop producers indicating they expect rental rates to decline. 

One supporting factor for both farmland values and farmland cash rental rates could be producers’ expectations regarding the farm income safety net provided by U.S. farm programs. In this month’s survey, 31% of respondents said they expect the safety net in the 2025 Farm Bill to be stronger than in the previous Farm Bill.

U.S. farmers in July were somewhat more optimistic about future agricultural trade prospects than a month earlier. This month, 43% of respondents said they expect agricultural exports to increase in the upcoming five years, up from 41% a month earlier. Fewer producers said they look for exports to decline, dropping to 13% of respondents, down from 16% who felt that way in June. In a related question, 64% of this month’s survey respondents said they think it likely that new foreign export markets will open up to American agricultural goods in the next five years. To further gauge U.S. farmers’ outlook regarding trade and policy, this month’s survey included the following question: “Would you say things in the United States today are generally headed in the right direction or on the wrong track?” Seventy-four percent of respondents said the U.S. is headed in the “right direction.”

Wrapping Up

U.S. farmers’ sentiment declined in July as weaker farm income prospects dimmed producers’ view of current conditions and their future expectations. Despite a weaker crop income outlook, just 11% of crop producers said they expect farmland cash rental rates to decline, with a majority reporting that they expect rental rates to stay about the same. Helping to support producers’ farmland value and rental rate outlook is farmers’ expectation for a stronger farm income safety net, with nearly one-third (31%) of U.S. producers saying they expect the 2025 Farm Bill to provide a stronger safety net than the previous Farm Bill. Producers in July were somewhat more optimistic about U.S. agricultural trade prospects than in June, while nearly three-fourths (74%) of U.S. farmers responding to the survey reported that they feel that things in the U.S. are headed “in the right direction.”