Farmer Sentiment Slips on Policy Uncertainty

Farmer sentiment dropped during March as concerns over agricultural trade and farm policy weighed on producers’ outlook for the future.  The Purdue University/CME Group Ag Economy Barometer, released last week, fell 12 points to 140, down from 152 in February.  The Index saw a 15-point drop in the Index of Future Expectations to 144, and the Current Conditions Index fell five points to 132.  Report authors said the drop was influenced by falling crop prices since mid-February, along with the increasing uncertainty surrounding agricultural trade and farm policy.

The Short-Term Farmland Value Expectations Index remained steady at 118 in March, only six points lower than in March 2024.  Purdue ag economist James Mintert said the export expectations for the next five years hit an all-time barometer low.

“30% of producers expect to see exports fall, nearly matching the percentage of producers who expect to see exports rise, suggesting producers outlook for Ag exports, which predominantly have been a real source of growth in the U.S. Ag sector for decades really shifted." 

Keeping on with the trade theme, Mintert said they asked producers which of the following policies or programs, between trade policy and interest rate policy, will be most important over the next five years, and he noted there's been a shift since the election.

“Back in August, before the election, 22% of the response in the survey chose interest rate policy as one of their top concerns versus 20% choosing trade policy," Mintert noted.  "Since the election, over 40%, an average of 43% of the response to the survey, have chosen trade policy as their top concern. While the percentage choosing interest rate policy as a top concern has been falling and this month was just 10%.”

The Index indicates that producers still anticipate better financial performance this year than in 2024.

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