News Release

WEST LAFAYETTE — The Purdue University/CME Group Ag Economy Barometer recorded its lowest readings since March 2016 in September. Declining income expectations pushed farmer sentiment down as the barometer fell 12 points to 88, and the Index of Future Expectations dropped 14 points to 94. The Index of Current Conditions also fell 7 points to 76, which nearly matched levels seen in April 2020, during the height of COVID-19 concerns for farmers. This month’s survey was conducted from Sept. 9-13.

September’s survey revealed that farmers are increasingly worried about commodity prices, input costs, agricultural trade prospects and the potential impact of the upcoming election on their farm operations. When asked to identify their top concerns for the coming year, low commodity prices and high input costs were nearly tied, with 34% of farmers citing input prices and 33% pointing to lower output prices as their primary concerns. Interest rates trailed behind as a top concern, chosen by 17% of respondents.

Producers’ apprehensions about commodity prices matched up with their lack of confidence in the future of U.S. agricultural exports; only 26% of respondents expect ag exports to rise over the next five years, the most pessimistic response to this question since it was first introduced in 2019. Additionally, 78% of producers expressed concern that government policy changes following the fall 2024 elections could impact their farms.

The continued drop in the barometer reflects deepening concerns among farmers regarding expectations for farm income in 2024 and 2025. It’s notable that producer sentiment dropped back to levels last seen in 2016 when the U.S. farm economy was in the early stages of an economic downturn. In addition to commodity prices and input costs weighing heavily on their operations, producers are also facing considerable uncertainty about what lies ahead for their farms with the possibility of government policy changes following the upcoming 2024 elections.

The Farm Financial Performance Index fell for the third consecutive month, dropping to 68 in September from 72 in August. Farmers’ financial expectations have declined markedly compared to a year ago, as the index was at 86 in September 2023 — an 18-point difference. While the Farm Capital Investment Index increased by 4 points from August to a reading of 35, it still sits just above its all-time low, indicating that many producers believe it is not an opportune time for making large investments.

The Short-Term Farmland Value Expectations Index dropped by 10 points to 95. This is the first time since 2020 that the index fell below 100, indicating that more farmers are expecting a decline in farmland values over the next year than those who anticipate an increase. This month’s shift from a positive to a weaker outlook is attributable to a sharp decrease in the percentage of producers forecasting rising values and a rise in those who expect values to remain steady.

The September survey marks the fourth consecutive year that the barometer has included questions regarding cover crop usage among corn and soybean producers. Consistent with prior years’ surveys, more than half of the respondents indicated that they currently plant cover crops on part of their farms, while an additional one in five farmers reported planting cover crops sometime in the past.

Interestingly, farmers who currently use cover crops say they are devoting a larger proportion of their farm’s acreage to cover crops than in the past. In 2021, 41% of cover crop users said they plant them on more than 25% of their farm’s acreage. This figure rose to 50% in 2023, and in this year’s survey, 68% of cover crop users indicated they plant cover crops on more than one-fourth of their farm acreage.