News Release

WEST LAFAYETTE — The August Purdue University/CME Group Ag Economy Barometer dropped 13 points from July to a reading of 100, echoing levels seen from fall 2015 to winter 2016 during the early stages of a significant downturn in the U.S. farm economy.

The Index of Current Conditions also dropped 17 points to 83, while the Index of Future Expectations decreased by 11 points to 108. Weakening farm income prospects weighed on farmers’ sentiment as the outlook for a bountiful fall harvest was more than offset by declining crop prices. This month’s decline in the barometer and related indices provide a signal that farmers are concerned about the possibility of extended weakness in farm incomes, similar to what took place from 2015 to 2019. This month’s survey was conducted from Aug. 12-16, 2024.

Purdue/CME Group Ag Economy Barometer, October 2015-August 2024.

August’s survey results indicate a shift among farmers’ primary concerns, with 30% of respondents identifying lower commodity prices as their primary concern, compared to 33% who cited high input costs. Last year at this time only 20% pointed to weak commodity prices as a top concern.

At the same time, concerns about rising interest rates have lessened, with only 17% of farmers mentioning this issue, down from 24% last year. Looking ahead, 68% of respondents expect interest rates to decrease in the coming year, while just 19% anticipate an increase.

The Farm Financial Performance Index dropped 9 points from July’s survey and 14 points from a year ago, reaching its lowest level since July 2020, when there was widespread uncertainty from COVID-related lockdowns. The decline in financial performance reflects ongoing concerns about weak financial conditions. In turn, weakening financial conditions led many farmers to say that now is not a good time to invest, resulting in the Farm Capital Investment Index falling 7 points to 31, matching its all-time low.

Looking at recent results from our survey’s questions regarding farmland values, it’s clear that farmers were less optimistic about farmland values this summer than in recent years. In particular, the percentage of farmers who think farmland values could decline within the upcoming year has been rising, which is consistent with the weak outlook for financial conditions. The weak capital investment index reading also suggests farmers are going to pull back on capital expenditures.

The Short-Term Farmland Value Expectations Index fell 13 points to 105 in August. This month’s declines leaves the index 21-points below a year ago and 41-points lower than three years ago, when the index was peaking. The decrease is attributable to a rise in the percentage of producers expecting farmland values to decline over the next year, increasing from 13% in July to 24% in August. The Long-Term Farmland Value Expectations Index also weakened in August, dropping 4 points from July’s reading to 142.

Interestingly, despite concerns about weakening farm income, a majority of respondents expect farmland cash rental rates for the 2025 crop year to remain stable. According to this month’s survey, 70% of U.S. crop farmers anticipate that farmland rental rates will stay the same, while only 16% expect a decline in lease rates.