Farmer sentiment weakened in June after two months of improvement, according to the Purdue University/CME Group Ag Economy Barometer. The overall barometer dropped 12 points to 146 from May, which had marked the highest level since 2021.

The decline was largely driven by reduced optimism about the future of agricultural exports, with the Index of Future Expectations falling 18 points to 146. Along the same lines, the percentage of farmers expecting agricultural exports to increase over the next five years fell to 41% from 52%, and those anticipating declining exports rose to 16% from 12% in May.

The survey also explored producers' views on trade. Only 31% of farmers strongly agreed in June that “free trade benefits agriculture and most other American industries,” consistent with May’s results but down from 49% five years ago.

Regarding U.S. tariff policies, 45% of producers in May and June expected a negative or very negative impact on farm income, a decrease from 56% in March and April.

The Farm Financial Performance Index dropped 5 points to 104, indicating a slightly weaker financial outlook for 2025 compared to last year. The index has fluctuated between 101 and 111 since January.

On the other hand, the Farm Capital Investment Index rose 5 points to 60, nearly matching April’s reading of 61, and the share of farmers who said it was a good time to invest climbed to 24% from 19%, while the percentage viewing it as a bad time to invest remained unchanged.

Despite this improvement, planned farm machinery purchases are declining, with 54% of producers intending to reduce machinery investments this year.

Each month, the university surveys 400 farmers across the country on their thoughts on the agricultural economy. Despite the decreases, all three indices remain above levels recorded a year ago.