High input costs weigh down on farmer sentiment
United States farmer sentiment slipped yet again in May, according to the latest Purdue University/CME Group Ag Economy Barometer report. Concerns over rising production costs and financial pressure continued to strain views, the document read.
The index fell to 119 from 121 in April, while the Current Conditions Index dropped eight points to 83, its lowest reading since December 2024. The Future Expectations Index showed a slight improvement, edging up one point.
A record 51 percent of farmers identified input expenses as their top issue, while 46 percent said those costs are limiting improvements in their financial position this year.
Financial outlooks remained cautious. Just 14 percent of respondents said their farms were better off financially than a year ago, and 22 percent expect conditions to improve over the next 12 months.
The Farm Capital Investment Index fell three points to 41, its lowest level since September 2024, as producers remain reluctant to make major investments.
"This is especially challenging in an environment where many producers are already operating with tighter margins," said Michael Langemeier, the barometer's principal investigator and director of Purdue's Center for Commercial Agriculture.
The assessment surveyed 400 producers nationwide between May 11 and May 15.
Income concerns drag farmer sentiment down
Approximately two-thirds of respondents said they expect their farm's net income to decline in 2026. Among farmers who planted corn in 2025, nearly half said they expect break-even prices to increase by up to six percent next year, while 30 percent anticipate increases of ten percent or more.
Labor availability remains a challenge for some operations. About 39 percent of respondents employ nonfamily workers, and 44 percent of those employers reported experiencing some or significant difficulty hiring labor this year.
Participants expressed limited confidence in artificial intelligence as a solution to labor and equipment challenges. Fifty-nine percent said AI would not improve their current situation, while 37 percent said it would help a little, and four percent said it would help a lot.
Despite weaker sentiment regarding current farm conditions, producers became more optimistic about farmland values. The Short-Term Farmland Value Expectations Index rose from 121 in April to 130 in May, while the long-term index increased from 155 to 160.
Respondents identified alternative investments, interest rates, and net farm income as the primary factors.
The survey also found a continued decline in optimism about the country's future. Since Purdue began asking the question in July 2025, the share of respondents who believe the US is headed in the "right direction" has fallen steadily from an average of 71 percent during the second half of 2025 to 52 percent in May, the lowest level recorded since the question was introduced.
Producers also maintained markedly different outlooks for crop and livestock agriculture. Thirty-one percent of respondents said they expect favorable financial conditions for crop producers during the next five years, compared with 68 percent who expect good times for livestock producers.
*Photos are referential.
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