The Purdue University CMA group’s Ag Economy Barometer for January 2025 showed an improvement in the health of the US agricultural economy. However, key concerns for producers for 2025 include rising input costs and decreasing prices for crops and livestock.
U.S. Farmers’ Retain Optimistic Outlook for 2025 Despite Ag Trade Uncertainty
February 4, 2025
James Mintert and Michael Langemeier, Purdue Center for Commercial Agriculture
U.S. farmers retained their post-election optimistic outlook at the start of the new year as the January Purdue University-CME Group Ag Economy Barometer Index rose 5 points above a month earlier to a reading of 141. The barometer’s rise was primarily attributable to a 9-point rise in the Current Conditions Index, while the Future Expectations Index rose just 3 points. Compared to recent surveys, fewer producers this month pointed to lower crop and livestock prices as a top concern, which helped explain why producers felt better about the current situation. The shift in attitudes was attributable in part to an improvement in crop prices from the time of the December to the January survey. For example, Eastern Corn Belt prices for near-term delivery of corn and soybeans rose 9% and 5%, respectively, from early December to mid-January. Although producers’ appraisal of the current situation improved in January, U.S. farmers remain markedly more optimistic about the future than the current situation, as the Future Expectations Index this month was still 47 points above the Current Conditions Index. The January barometer survey took place from January 13-17, 2025.
The Farm Financial Performance Index rose 13 points in January, mirroring the rise in the Current Conditions Index. The increase in the financial performance index signals that, on average, producers expect 2025 to be a better year than 2024. The Farm Capital Investment Index, at a reading of 48 in January, was unchanged compared to a month earlier. The investment index continues to be notably stronger than last summer when it dipped to a low of 31, with this month’s index the second-highest reading of the last three years. Optimistic expectations for the future appear to be behind the strength in the investment index, but it remains to be seen whether producers’ improved attitude translates into more farm machinery and new construction investments.
The Short-Term Farmland Value Expectations Index rose by 5 points to 115 in January as the index reverted to the same reading as in November. Farmers’ confidence that farmland values will continue to rise dipped late last summer when crop prices were weakening but recovered sharply in October. Since October, the index has fluctuated between values of 110 to 120. The modest improvement in the index this month was attributable to an increase in the number of producers who said they expect values to rise, while fewer producers said they expect values to ….. Read the full report here.