WEST
LAFAYETTE, Ind., Feb. 4, 2025
/PRNewswire/ -- U.S. farmers began 2025 with an optimistic outlook,
as the January Purdue University/CME
Group Ag Economy Barometer rose 5 points from the previous month to
a reading of 141. This increase was driven by a 9-point growth in
the Current Conditions Index and a 3-point rise in the Future
Expectations Index. The improvement in sentiment was linked to
higher crop prices between December and mid-January and fewer
producers citing crop and livestock prices as a top concern. For
instance, Eastern Corn Belt prices for near-term delivery of corn
and soybeans rose by 9% and 5%, respectively, during that period.
While farmers' views of current conditions improved, optimism about
the future remained even stronger, with the Future Expectations
Index exceeding the Current Conditions Index by 47 points. This
month's survey was conducted between Jan.
13-17.
The Farm Financial Performance Index climbed 13 points in
January, reflecting a similar rise in the Current Conditions Index
and indicating that producers, on average, anticipate 2025 will be
a more robust financial year than 2024. Meanwhile, the Farm Capital
Investment Index remained steady at a reading of 48, unchanged from
December. Despite no change, the investment index remains
significantly higher than last summer's low of 31 and represents
the second-highest reading of the past three years. Producers'
optimism about the future appears to support the stronger
investment index, though it remains uncertain whether this optimism
will lead to more farm machinery or new construction
investments.
"The January survey reflects a notable sense of optimism among
U.S. farmers, particularly regarding their expected financial
performance in 2025," said Michael
Langemeier, the barometer's principal investigator and
director of Purdue University's Center
for Commercial Agriculture. "Recent improvements in crop and
livestock prices have provided a boost to farmers' current
sentiment. Although farmers are optimistic about the future, there
are some clouds on the horizon. For example, more farmers this
month reported challenges in paying off operating loans compared to
the last couple of years, and many producers are worried about the
future of agricultural trade, with 40% of this month's respondents
saying they think a trade war is either likely or very likely."
The Short-Term Farmland Value Expectations Index rose 5 points
in January to a reading of 115, returning to its November level.
Farmers' confidence in rising farmland values, which dipped late
last summer amid weaker crop prices, has stabilized since October,
with the index fluctuating between 110 and 120 in recent months.
January's modest improvement reflects a higher percentage of
producers expecting values to increase, coupled with fewer
expecting values to remain unchanged. Meanwhile, the Long-Term
Farmland Value Expectations Index, which gauges expectations for
the next five years, declined 5 points to 150. Despite the dip, the
long-term index remains 8 points above its 12-month low recorded
last August.
The January barometer survey, which has annually included
questions about farmers' operating loans for the upcoming year
since 2020, revealed a slight increase in the percentage of
producers anticipating larger loans this year — 18%, up from 15% in
2024. Among those expecting an increase, 23% attributed it to
carrying over unpaid operating debt from the previous year,
compared to 17% last year and just 5% two years ago. The shift
reflects a decline in farm income, particularly crop income, over
the past two years and could be an early signal of rising financial
stress among producers.
Agricultural trade remains a top concern for U.S. farmers. In
January, 42% of producers identified "trade policy" as the most
important policy for their farm over the next five years, more than
double the 17% who selected "crop insurance program." While there
is still significant concern among U.S. farmers that a trade war
could break out that negatively impacts U.S. ag exports, responses
regarding worries about a potential trade war have eased slightly
since December, with 40% of producers now believing a trade war is
"likely" or "very likely," down from 48% the previous month.
Meanwhile, the percentage of farmers who see a trade war as
"unlikely" or "very unlikely" rose from 21% in December to 29% in
January.
Interest in leasing farmland for solar energy production
continues to grow. In January's survey, 11% of farmers reported
discussing solar leases for their land within the last six months.
Lease rates offered by solar energy companies in 2024 and 2025 were
notably higher than in previous years, with 40% of respondents
reporting offers of $1,250 per acre
or more and 26% receiving offers of $1,500 per acre or more. Additionally, 54% of
respondents noted that contracts included escalator clauses, most
commonly ranging from 2% to 3% annually, though some reported
escalators of 3% to 4% per year. Overall, 3% of survey respondents
said either they or one of their landowners had signed a solar
lease.
About the Purdue University
Center for Commercial Agriculture
The Center for Commercial Agriculture was founded in 2011 to
provide professional development and educational programs for
farmers. Housed within Purdue
University's Department of Agricultural Economics, the
center's faculty and staff develop and execute research and
educational programs that address the different needs of managing
in today's business environment.
About CME Group
As the world's leading derivatives marketplace, CME Group
enables clients to trade futures, options, cash and OTC markets,
optimize portfolios, and analyze data — empowering market
participants worldwide to efficiently manage risk and capture
opportunities. CME Group exchanges offer the widest range of global
benchmark products across all major asset classes based on interest
rates, equity indexes, foreign exchange, energy, agricultural
products and metals. The company offers futures and options on
futures trading through the CME Globex platform, fixed income
trading via BrokerTec and foreign exchange trading on the EBS
platform. In addition, it operates one of the world's leading
central counterparty clearing providers, CME Clearing.
CME Group, the Globe logo, CME, Chicago Mercantile Exchange,
Globex, and E-mini are trademarks of Chicago Mercantile Exchange
Inc. CBOT and Chicago Board of
Trade are trademarks of Board of Trade of the City of Chicago, Inc. NYMEX, New York
Mercantile Exchange and ClearPort are trademarks of New York
Mercantile Exchange, Inc. COMEX is a trademark of Commodity
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About Purdue University
Purdue University is a public
research university leading with excellence at scale. Ranked among
top 10 public universities in the United
States, Purdue discovers,
disseminates and deploys knowledge with a quality and at a scale
second to none. More than 107,000 students study at Purdue across multiple campuses, locations and
modalities, including more than 58,000 at our main campus in
West Lafayette and Indianapolis. Committed to affordability and
accessibility, Purdue's main campus has
frozen tuition 13 years in a row. See how Purdue never stops in the persistent pursuit of the
next giant leap — including its comprehensive urban expansion, the
Mitch Daniels School of Business, Purdue Computes and the One
Health initiative — at
https://www.purdue.edu/president/strategic-initiatives.
Author: Morgan French
Source: Michael Langemeier,
mlangeme@purdue.edu, 765-494-9557
CME-G
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SOURCE CME Group
