Farmer sentiment improves as future expectations strengthen

U.S. farmers’ perspective on the future improved in March helping to push the Purdue University/CME Group Ag Economy Barometer up three points from February to a reading of 114, though that was still three points (2.6%) under year-ago. The Index of Current Conditions dropped two points from February, while Future Expectations increased five points.

Farmers expect financial conditions on their farms to improve in the year ahead, buttressed by an improved interest outlook with nearly half of the respondents saying they expected lower rates over the next 12 months. More producers said this is a good time to make large investments helping to push the Farm Capital Investment Index up seven points compared to a month earlier. Farmers’ short-run outlook for farmland values also improved, climbing nine points from the February reading.

The March barometer survey included several questions focused on farmers’ policy expectations following the fall 2024 elections. Eighty percent of the respondents said they are concerned that, following the fall 2024 elections, there will be government policy changes affecting their farms in the years ahead. Forty-three percent of respondents said they think regulations impacting agriculture will be more restrictive following the elections while just 18% said they expect a less restrictive operating environment. Nearly four out of 10 producers (39%) said they think taxes impacting agriculture will rise following the fall 2024 election while half of respondents said they expect no change in agriculture’s tax environment.