Farmer sentiment improved for a second month in a row in August, but concerns about input costs showed no signs of fading and the percentage of respondents who see the U.S. on the “right track” declined, according to the Purdue University-CME Group Ag Economy Barometer released Tuesday, rising from 126 points in July to 135 points. And while farmers are feeling better about both the present and the future, they’re still holding back on major investments, the survey found.
The survey’s two sub-indexes also rose, with the Index of Current Conditions up 1 point, while the Index of Future Expectations gained 11 points. Notably, for the first time since June 2025, a higher proportion of respondents expect their operation to be better off financially (28%) than worse off (24%) a year from now, noted Purdue ag economists Michael Langemeier and Joana Colussi. The survey also found more optimism over export prospects, while high input costs remained the top concern of 45% of respondents. The survey of 402 farmers across the U.S. ran from Aug. 10 to 14.
Despite the improved sentiment, the Farm Capital Investment Index fell to 45 in August from 50 the previous month.
“In other words feeling better about farms’ financial outlook doesn’t necessarily translate into being ready to buy a new combine or put up a new building and that distinction is very important,” Langemeier said in a video. “There’s a difference between saying, ‘I think my financial situation is going to improve’ and saying ‘I’m comfortable making a major financial investment right now.”
Langemeier said farmers appear to be more comfortable with the first statement then the second, he said, which makes sense given that higher input costs remain the top concern, followed by worries about low crop and livestock prices and rising interest rates.
“So even though farmers are becoming more optimistic about the year ahead, they’re still operating in an environment where costs are high and returns on large investment aren’t necessarily obvious,” he said. “And that may help explain why the improvement in sentiment hasn’t translated into stronger investment intentions.”
Among the other highlights:
- The Short-Term Farmland Value Expectations Index increased by 8 points to 127 in August. Alternative investments, interest rates, and inflation were cited as the three factors with the greatest influence on farmland values.
- Asked to rate farmland as an investment, 65% of respondents indicated that farmland was a good investment, 17% indicated that farmland was a medium investment, and 18% indicated that farmland was a poor investment.
- The percentage of respondents who described the U.S. as heading in the “right direction” fell to 51% from 54% in July.
Langemeier said improved sentiment on farmland values was another piece of the puzzle explaining the disconnect between overall sentiment and willingness to make capital investments.
“So farmers are feeling somewhat better about their financial prospects. Land values are expected to remain relatively strong but investment in machinery and buildings remains subdued,” he said. “That’s a pretty cautious form of optimism...farmers are becoming more optimistic about the future but they’re not necessarily ready to act on that optimism by making large capital investments.”
That caution makes sense given continued worries over high input costs, he said.