Current Conditions Continue To Be A Drag On Farmer Confidence

Farmer confidence slipped again in June. The latest Purdue University/CME Group Ag Economy Barometer fell six points to 113, while producers rated current farm conditions at their lowest level in a year and a half.

High input costs remained producers' top concern, with 47% identifying them as the biggest challenge facing their operation, followed by low crop and livestock prices at 23%. A related question revealed that 42% of respondents feel high input costs are limiting improvements in their financial position this year.

Most Farmers Don't Expect Finances To Improve In The Next Year

"While high input costs remain the primary constraint on farm financial performance, producers are continuing to make decisions in a broader environment shaped by technology adoption, trade expectations and long-term land value outlook," said Michael Langemeier, the barometer's principal investigator and director of Purdue's Center for Commercial Agriculture.

Additional survey results illustrated the financial challenges facing producers. Just 12% of respondents said their farms were better off financially than a year ago, while only 22% expected their operations to improve over the next 12 months. Reflecting that cautious outlook, the Farm Capital Investment Index has continued its fall from the March 2026 survey to 40, its lowest level since September 2024.

June's survey included two questions on the use of AI and other data-driven tools in agriculture. When asked about potential benefits, 23% of respondents cited increased production as the primary advantage, 14% cited reduced labor needs, and 11% cited reduced risk or uncertainty. However, a majority of respondents (52%) said they did not see a meaningful benefit from these tools.

Long-Term Outlook Weakened Year-Over-Year

Producers expressed generally positive expectations for agricultural exports over the next five years and showed strong support for free trade. While 9% of respondents expected agricultural exports to decline, 43% expected exports to increase over the next five years. 85% agreed or strongly agreed with the statement that free trade benefits agriculture and most other American industries.

Beyond trade expectations, longer-term outlooks for the farm sector weakened compared with a year ago. The percentage of respondents expecting "good times" over the next five years fell to 32% in June, 17 percentage points lower than in the June 2025 survey. Expectations also continued to vary notably by sector, with 25% of respondents expecting good times for crop producers compared with 68% for livestock producers.

Since July 2025, producers have been asked whether they think the U.S. is headed in the "right direction" or on the "wrong track." After averaging 71% during the final six months of 2025, the percentage of producers reporting the U.S. is headed in the "right direction" was 52% in May and 53% in June.