U.S. farmer sentiment declines amid export and tariff concerns

56328
©

U.S. farmer sentiment declined in June after two consecutive months of improvement, according to the Ag Economy Barometer, a monthly survey conducted by Purdue University and CME Group. The overall index dropped by 12 points, falling from 158 in May to 146 in June.

The decline was primarily driven by worsening expectations for the future. The Index of Future Expectations fell by 18 points to 146, while the Current Conditions Index dropped only slightly, by 2 points to 144. A key factor behind the more pessimistic outlook appears to be reduced optimism about the future of U.S. agricultural exports.

Key Index Changes:

  • The Farm Financial Performance Index fell by 5 points to 104, reflecting slightly weaker expectations for farm profitability in 2025. Despite the dip, the livestock sector — particularly beef producers — continues to support income expectations.
  • The Farm Capital Investment Index rose by 5 points to 60, nearly reaching April's level of 61. The share of farmers who believe it’s a good time to invest increased from 19% in May to 24% in June.
  • However, 54% of farmers reported plans to reduce equipment purchases this year compared to last — up 6 points from May.
  • The Short-Term Farmland Value Expectations Index dropped 4 points to 120. The percentage of producers expecting land values to rise declined from 37% to 32%, while those expecting values to remain stable increased to 56%.

Trade and Tariff Impacts

Sentiment toward U.S. agricultural export growth has declined. From May to June, the share of farmers who expect export growth over the next five years dropped from 52% to 41%, while those expecting declines rose to 16%.

Confidence in free trade also appears to be waning. Only 31% of respondents in June strongly agreed that free trade benefits agriculture and most U.S. industries, compared to 49% in 2020.

Concerns about U.S. trade policy and tariffs remain, although fears have eased slightly. In March and April, 56% of respondents said tariffs would negatively impact their farm income. That figure dropped to 45% in May and June. Meanwhile, the share of producers who expect a positive impact from tariffs increased from 23% to 27%.

“Overall, we’re seeing weaker agricultural producer sentiment alongside reduced expectations for the future,” said Michael Langemeier, principal investigator of the barometer and director of Purdue University’s Center for Commercial Agriculture.
“The decline in export optimism stands out as a major driver. While farmers still worry that U.S. tariff policies may hurt their income, fewer now expect a negative outcome than earlier this spring.”

thepigsite.com