April 8, 2026 • 18 mins
Farmer sentiment improved in March—but the underlying pressures in the farm economy haven’t gone away.
In this episode of the Purdue Commercial AgCast, Joana Colussi and Michael Langemeier break down the March 2026 Purdue University/CME Group Ag Economy Barometer. Despite rising input costs and global uncertainty tied to geopolitical conflict, farmer sentiment moved higher—driven in part by stronger crop prices and government payments.
But the improvement comes with important caveats.
Tight margins, rising breakeven costs, and shifting risk priorities are shaping how farmers approach investment, production, and long-term strategy.
More importantly, these signals highlight how producers are balancing short-term optimism with longer-term uncertainty.
In this episode, we discuss: • What’s driving the recent increase in farmer sentiment • How $35/acre payments and higher corn prices are influencing outlook • Why only 4% of farmers plan to increase machinery purchases • How rising input costs are impacting breakeven prices and profitability • Why financial risk has overtaken marketing risk for many farms • What farmers expect for inflation and interest rates in the year ahead • How solar leasing is evolving across regions and land markets • What’s driving farmland value expectations in 2026
📊 Read the full Ag Economy Barometer report: https://purdue.ag/barometer126
—
For more farm management resources, visit: 👉 https://purdue.ag/commercialag
Subscribe to the podcast: 👉 https://purdue.ag/agcast
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(00:05):
Welcome to Purdue Commercial AgCast.
I am Joana Colussi, research assistantprofessor in Agriculture Economics,
and I'm here with Michael Langemeier,professor and director of Purdue
Center for Commercial Agriculture.
This is a special episode for us becausewe are recording the podcast for the
first time from our office here at Purdue.
(00:28):
We thought it would be a nice wayto bring you a little closer to
the place where we work every day.
Today we are breaking down theresults of the March 2026, Purdue
University- CME Group Ag Barometer.
Every month we survey 400 farmers acrossthe U.S. to learn more about how they
(00:50):
are feeling about the farm economy.
This month survey was conductedfrom March 16 to March 20.
But before you get start, be sureto like this video, subscribe to the
channel, and turn on notificationsso you don't miss future episodes.
Let's take a look at thismonth's Ag Economy Barometer.
(01:13):
The overall index rose 11 pointsfrom 116 in February to 127 in March.
Both the Index of CurrentConditions and the Index of Future
Expectations also moved higher.
With the biggest jump coming inthe Future Expectation Index up
(01:35):
14 points from the previous month.
Even so, that index remains 12points below, uh, last December's
reading and 16 points below itslevel in March of last year.
Overall though, we can say thatU.S. farmer sentiment improved in
March compared to the February.
(01:57):
And that's especially interestingbecause since then, uh, we have
seen the outbreak of war with Iran.
Which is affecting global markets,including fertilizer, uh, prices.
Michael, what do you think is behindthat improvement now in March?
Well, certainly the impact of higherenergy prices and higher fertilizer prices
(02:19):
had a negative impact on sentiment, butthere was other factors going on here.
And one of 'em that we didn'ttalk about in the report, uh, that
that's obviously was going on isthe bridge payments were going out.
Uh, and the bridge payments, uh, ifyou average those for corn, soybean
par farm were about $35 per acre.
And so they were rather sizable.
And so that probably boosted sentiment.
(02:40):
But also if you look at, uh, uh, corn andsoybean prices, particularly corn prices.
Uh, corn prices were up.
If you look at the time we surveyedin, in March compared to the time we
surveyed in in February, and one of theinteresting things about corn prices
is it's not perfectly correlated withenergy prices, but it is positively
correlated with energy prices and so andso because the energy prices went up.
(03:01):
Corn prices went up a littlebit, and I think that off offset
some of the negative, uh, thenegativity, uh, regarding the
higher energy and fertilizer prices.
Another thing I think is importantto point out is a lot of pro
producers probably already hadpurchased their fertilizer.
Uh, and so this isn't gonna be quiteas much impact for those people.
Uh, there is people that hadn't.
(03:22):
Uh, and then also I would thinkthat, uh, uh, people that are going
to do, uh, you know, do get putsome of the fertilizer on in season.
They probably hadn't bought all of that.
And so I'm not saying the, the impactof the fertilizer prices is neutral,
but it, it's not as big as, as youmight think, uh, because people had
probably bought quite a bit of theirfertilizer before the war started.
Do you have a idea how much percentof the farmers aready bought the
(03:45):
fertilizers for in the coming season?
I just read someplace it was about 80%.
I don't know how accurate that figure is.
Mm-hmm.
That's a good amount.
Yeah, that'd be very high percentage.
Mm-hmm.
And we continue to see moreoptimists, uh, on the livestock side.
Compared to crop production, only 31%of respondents expected good times
(04:06):
for crop producers, while 63% expectedgood times for livestock producers.
And now let's turn to theFarm Capital Investment Index.
That measure moved up three pointsthis month reaching 53 points.
However, only 4% of survey respondentsindicated that they plan to increase farm
(04:29):
machinery purchase in the upcoming year.
Michael, uh.
Why are farmers still trying to avoidlarge investments, especially machinery?
I, I think if you look at the netreturns, particularly for crop
producers, they're, they're very tight.
Uh, and when you see relativelylow net returns like this, uh,
they have a tendency to cover ownerwithdrawals and principle payments
(04:51):
before, uh, they purchase a machinery.
That's just a natural.
Way to, way to think about cash flow.
Uh, and, and usually there's notenough cash flow left over, uh, you
know, to seriously consider, uh,buying, buying, uh, machinery in 2026.
Uh, that was also the case in 2025.
And so this index has been relativelylow, uh, for the last 18 months.
(05:13):
It's, it's been really, uh, it's reallybeen really, uh, arranging for about
50 to 60, uh, for the last 18 months.
And is there an expectation that thesituation could change in a short term?
It would take a substantially higherprices than what we're seeing right now.
Uh, it would probably, uh, if youlook at something like the IFR
and price distribution tool, whichkind looks at the probability
(05:33):
of prices, prices would probablyhave to be in that upper quartile.
Mm-hmm.
There's a probability, 25%chance of prices could be high
enough that you'd see, uh, moreinterest in, in buying machinery.
Mm-hmm.
And the cost production of the situation.
Yeah.
Obviously that thatsituation's actually worse.
Mm-hmm.
Uh, you know, since the war andit wasn't too good before that.
(05:53):
And so break even pricesincreased a little bit.
Uh, just to give you some example, someidea of the, of, of, of the magnitude, if
somebody hadn't bought their fertilizer,uh, and, and they were buying fertilizer.
Buying quite a bit of their fertilizer,uh, under these new, new prices, uh,
breakeven price for corn would be about10 to 15, uh, cents per bushel higher.
Mm-hmm.
(06:15):
Yeah.
And that concern, uh, about costproduction shows up very clearly in
the response to the next question.
Uh, looking ahead to the nextyear, what's your biggest concern
for your farming operation?
The percentage of respondents whopointed to high input costs air
(06:35):
their top concern increased from 40.
4% to 46% this month.
Concern about input, availability alsomoved higher rising from 8% to 11%.
Michael, we are red seeing fertilizer,uh, prices moving higher because of the
(06:55):
war, which I, uh, which could direct.
Production, productioncosts, we just talking about.
Do you think these concerns arelikely to grow in the months ahead?
We know that this questionis tough because we don't
know what it will happen, but
Yeah, if you look a year ago, the,the, the, uh, the biggest concern
was input cost and it was about 40%.
(07:15):
So it certainly has grown here.
In the last, last few months,it was at 44% in February.
So not exactly a small percentage,and then a further increase in March.
I think it's gonna stayaround that 40 to 45% for the
foreseeable, foreseeable future.
And this is true for even, evenfor livestock producers because,
uh, if you know, for if youwere a, a feeder producer or.
(07:38):
Someone that finishes cattle, one ofyour big expenses, buying the, the
cattle, buying the feeders, or buyingthe calves or buying the feeders.
And, and that's included in, inaggregate input price indices.
And so, uh, and so you're, and soinput costs are gonna, input, costs
are gonna be concern for both crop andlivestock producers moving forward.
Mm-hmm.
So we can see some changes in this index.
(08:00):
Yes.
Mm-hmm.
Uh, this month survey includedquestions about inflation and
interest rate expectations.
Almost 40% of respondents expectedinflation for consumers to be above 3%.
When asked whether the USinterest rate would be lower.
(08:20):
About the same or higher12 months from now.
34% of respondents indicated that theinterest rates would be lower while 16%
said interest rates would be higher.
Uh, Michael, it seems likefarmers are still concerned about
inflation, but at the same timeexpect interest rates to move lower.
(08:42):
Uh, how do you read this results?
I, I think we're gonna continueto ask this question because
this is kind of a moving target.
I, I've heard, uh, I've heard information,um, uh, not necessarily coming outta
the Fed, but those that watch the Fed.
Very carefully that they couldreduce rates, but they could also
increase rates because they'relooking at inflation very closely.
(09:03):
That's why we put both thosequestions in there this month.
And so, uh, so we're gonna continue toask this because I, I do think you're
gonna, you're gonna see, you're gonna seesome people on both ends of the spectrum.
You know, some peopleare gonna expect lower.
That was kind of what we anticipatedlast year, uh, coming into 26.
But there's also gonna be that group, uh,that expect interest rates to be higher.
(09:23):
And this is huge, not only because,uh, uh, it impacts operating costs,
but it, it impacts asset prices.
Uh, and so it's, it's, so it's veryimportant to, to ask this question
and, and relate it to land values.
Mm-hmm.
That's another factor.
So financial concerns werealso clear in these questions.
Uh, when we asked farmers whichtype of risk they see as the biggest
(09:46):
treat to their operation, 33% pointedout financial risk followed by
marketing risk and production risk.
We have also other risks.
Could you?
Yeah.
There's also, uh.
There's also human resource or, or laborrisk, legal risk and strategic risk.
They tended to be 10% or below.
And so the big three, which is typical,uh, financial marketing and production.
(10:10):
Uh, but when we've asked this question inthe past, marketing usually is the first.
And so the fact that financials, uh, thefirst really, really is an indicator,
again of, of how tight those marginsare, particularly for the crop sector.
That's true.
Uh, and from time to time.
The monthly survey includes questionsabout leasing, farm land for solar.
(10:30):
Energy production.
In this month survey, 12% of farmerssaid that they had talk about lease and
farmland they own for solar developmentduring the preview six months.
Overall, 5% of respondents said thateither they or one of their land
landowners had signed a solar lease.
(10:52):
Michael, how should weanalyze these numbers?
Solar Lising becoming a morecommon part of the conversation
in the farmland used in the us.
Yeah, the one of the, we have a chartin the report that looks at the, looks
at the percentage that, that, thattalked to someone about solar leases
going back all the way to early 24.
And, uh, a couple of thosemonths it was close to 20%.
(11:16):
Uh, close to 20% of the respondents had,had, had been approached by somebody,
and that was before the 24 election.
Uh, and so we are really trying togauge here, at least that's one of
the things I was trying to gauge.
Did that fall off the cliff?
Uh, you know, in terms of thepercentage that had been approached,
uh, since the 20, since the 24election and no, not really.
It, it's still 12%, uh, it was 11%in, in January 25 and 12% this month.
(11:40):
And so there's still a lot of, a lotof people, uh, being approached by,
by solar companies about the potentialof, of leasing ground for solar.
One of the things that was interesting.
In the results this month, and, andwe didn't put this in the report,
but uh, uh, we, we did ask thequestion about what was the rate, and
we had a lot of different buckets.
It was all over the place.
(12:01):
And so that's one of the reasons I didn'tput in the report because it's hard to
figure out exactly what's going on there.
There was quite a few below 500.
Uh, there was quite a few above 1250.
There was about 30%.
There were above 1,250, but, but, uh,it was a very, very wide, uh, wide, uh,
(12:21):
difference between the, the high endand the low end in terms of those rates.
And I think way I interpret that.
Is that probably these solar leasesare, uh, people are being approached
in these solar leases all overthe corn belt and gray plains.
And, and if you go into areas wherethe, where the cash rent's not as
high as what it is in Indiana, youdon't need to offer a thousand dollars
(12:42):
because you compare it to the cash rent.
And so my guess, we didn't ask this, butmy guess is the lower rates are occurring
in areas, uh, that have lower rent.
Oh yes.
Makes sense.
The eastern, eastern corn belt here is,is where some of the higher rates mm-hmm.
Are occurring.
The rates over 1250, for example.
Mm-hmm.
It's kind of still a newmarket that's developing.
So many things going on.
(13:02):
Yes.
They trying to adjustaccording to each situation.
That's different.
But we, we, we'll periodically askthat question at least once a year.
We'll try to get a gauge on what'shappening in the, uh, solar leasing.
To be able to compare.
Yes.
Yeah.
So, and uh, turning to farmland values,the short term farmland value expectation
index rose from 123 to 125 in March.
(13:26):
Marking its, uh, highestreading since May, 2025.
The long-term index also moved higherthis month, rising from 150 to 159.
Respondents identify alternativeinvestments, net farm income and interest
rates as the three factors which thegreatest influence on farmland values.
(13:50):
I dunno if you have any additionalcomments in these results?
Yes.
We're actually, we're actually,I'm actually working on an article
that's comparing the characteristicsand sediment for those that expect
land values to go down in the next12 months and those that expect land
values to go up in the next 12 months.
Uh, and there's a couple things thatare very interesting, uh, and, and
(14:10):
we'll put this out as an articleon our, on our website after, after
the, uh, the April 7th release.
Uh, and, uh, essentially.
One of the things that's happening is,is if the, uh, if you're a livestock
producer, you're probably moreoptimistic about land values going up.
That's very, very clear.
Mm-hmm.
But not surprisingly, those thatexpect land values to go up are quite
(14:31):
a bit more optimistic, particularlyabout the index of current conditions.
And that's, and that's leadingthem to think, well, you know, I'm.
You know, the currentconditions aren't that bad.
So, uh, and so land values aregonna go up in the next 12 months.
If you look at the people that, thatexpect lower land values, they're
very concerned about input costs,more concerned about input costs
than the, than than the other group.
(14:53):
Uh, but they're also, but they're also,uh, really worried about net farm income.
Uh, they, they, they said NetFormincome was the most important
factor influencing, uh, land land.
Land values in their area.
And so there's just a lot ofdifference among producers.
Uh, but, uh, but because that indexoccurring conditions was a little
stronger and that index of futureexpectations was a little stronger, I
(15:16):
was not surprised to see, uh, an increasein the index, both the short term land
value index and the long term value.
Uh, long-term land index, they tendto follow, uh, those two sub indices.
Mm-hmm.
Short term obviously following index ofcurrent conditions, long-term following
that index of future expectations.
Now it is, it is important to point outthat the long-term, uh, index is down a
(15:39):
little bit from what it was in December.
Uh, uh, but it, but it went up.
It, it's quite a bit higher than whatit was both in January and February.
And so, and so that leads me tobelieve, and we're gonna get to this,
that uh, people are a little bitmore optimistic about the, uh, the
current long-term policy environment.
Mm-hmm.
That's a good spoiler for thisarticle, when to be, yeah.
(16:01):
Running.
It's in April.
This article that you were writing?
Yes, yes.
Yeah.
Nice.
So, and, and as you have done in recentmonths, we ask at producers whether
they believe the US is headed inthe right direction or on the wrong.
Track, uh, in March, 65% said thatthe country is headed in the right
(16:25):
direction up from 59% in February.
Michael, would you say that thisreinforced the improved sentiment
we saw among producers in March?
I when I saw the higher.
Index of future expectations.
I went right away to what happenedto the long-term land values and
(16:45):
what happened to this question.
And they're very consistent.
You know, if you, if you, if you'remore confident about what's going on
five years from now, you're gonna bemore confident in where land values are
heading and where the US is heading.
And so they're all veryconsistent with one another.
Uh, they, they all saw increases.
They are.
Correlator connect in some
way, and maybe that maybe those, youknow, you have, we have to circle
(17:06):
back to those bridge payments.
Maybe those bridge payments, youknow, really made a lot of difference.
Not only short term, but long term,because it really did, it really did
change how you, how they view land valueswhen you, when you see a, when you see
a, an influx of, of $35 per acre, uh,you know, you know, for, in terms of
income for, for corn and soybean, uh, youknow, uh, farm, that, that's quite a bit.
(17:27):
Uh, and, and so maybe that'salso feeds into there somehow.
Yeah, we didn't touch somuch in the export Yes.
Chart, but we also cansee some impact from that.
Yes.
Because we know that in January andFebruary happened some shipments to China.
Yes.
That's certainly positive too.
Yeah.
And, and, and as I said atthe beginning, I mean it.
It wasn't just corn prices thatwere up, it was also soybean prices.
(17:49):
Soybean prices weren't up as much.
But, uh, uh, just to give as a frame ofreference here, uh, if you look at US cash
prices for soybeans, they're up 90 centsto a dollar per bushel since January.
And, and, and you would think eventuallythat's gonna have a positive impact
on, on, on sediment and it has,
yeah, probably.
(18:10):
Um, so those are the key highlightsfrom this month's survey.
You can find the full report on ourwebsite and we, that we have included
in the link and description below.
Thanks for watching and be sure tolike, follow and subscribe so you don't
miss future reports and videos from thePurdue Center for Commercial Agriculture.
(18:30):
We hope to see you again next month.
Welcome to Purdue Commercial AgCast.
I am Joana Colussi, research assistantprofessor in Agriculture Economics,
and I'm here with Michael Langemeier,professor and director of Purdue
Center for Commercial Agriculture.
This is a special episode for us becausewe are recording the podcast for the
first time from our office here at Purdue.
(00:28):
We thought it would be a nice wayto bring you a little closer to
the place where we work every day.
Today we are breaking down theresults of the March 2026, Purdue
University- CME Group Ag Barometer.
Every month we survey 400 farmers acrossthe U.S. to learn more about how they
(00:50):
are feeling about the farm economy.
This month survey was conductedfrom March 16 to March 20.
But before you get start, be sureto like this video, subscribe to the
channel, and turn on notificationsso you don't miss future episodes.
Let's take a look at thismonth's Ag Economy Barometer.
(01:13):
The overall index rose 11 pointsfrom 116 in February to 127 in March.
Both the Index of CurrentConditions and the Index of Future
Expectations also moved higher.
With the biggest jump coming inthe Future Expectation Index up
(01:35):
14 points from the previous month.
Even so, that index remains 12points below, uh, last December's
reading and 16 points below itslevel in March of last year.
Overall though, we can say thatU.S. farmer sentiment improved in
March compared to the February.
(01:57):
And that's especially interestingbecause since then, uh, we have
seen the outbreak of war with Iran.
Which is affecting global markets,including fertilizer, uh, prices.
Michael, what do you think is behindthat improvement now in March?
Well, certainly the impact of higherenergy prices and higher fertilizer prices
(02:19):
had a negative impact on sentiment, butthere was other factors going on here.
And one of 'em that we didn'ttalk about in the report, uh, that
that's obviously was going on isthe bridge payments were going out.
Uh, and the bridge payments, uh, ifyou average those for corn, soybean
par farm were about $35 per acre.
And so they were rather sizable.
And so that probably boosted sentiment.
(02:40):
But also if you look at, uh, uh, corn andsoybean prices, particularly corn prices.
Uh, corn prices were up.
If you look at the time we surveyedin, in March compared to the time we
surveyed in in February, and one of theinteresting things about corn prices
is it's not perfectly correlated withenergy prices, but it is positively
correlated with energy prices and so andso because the energy prices went up.
(03:01):
Corn prices went up a littlebit, and I think that off offset
some of the negative, uh, thenegativity, uh, regarding the
higher energy and fertilizer prices.
Another thing I think is importantto point out is a lot of pro
producers probably already hadpurchased their fertilizer.
Uh, and so this isn't gonna be quiteas much impact for those people.
Uh, there is people that hadn't.
(03:22):
Uh, and then also I would thinkthat, uh, uh, people that are going
to do, uh, you know, do get putsome of the fertilizer on in season.
They probably hadn't bought all of that.
And so I'm not saying the, the impactof the fertilizer prices is neutral,
but it, it's not as big as, as youmight think, uh, because people had
probably bought quite a bit of theirfertilizer before the war started.
Do you have a idea how much percentof the farmers aready bought the
(03:45):
fertilizers for in the coming season?
I just read someplace it was about 80%.
I don't know how accurate that figure is.
Mm-hmm.
That's a good amount.
Yeah, that'd be very high percentage.
Mm-hmm.
And we continue to see moreoptimists, uh, on the livestock side.
Compared to crop production, only 31%of respondents expected good times
(04:06):
for crop producers, while 63% expectedgood times for livestock producers.
And now let's turn to theFarm Capital Investment Index.
That measure moved up three pointsthis month reaching 53 points.
However, only 4% of survey respondentsindicated that they plan to increase farm
(04:29):
machinery purchase in the upcoming year.
Michael, uh.
Why are farmers still trying to avoidlarge investments, especially machinery?
I, I think if you look at the netreturns, particularly for crop
producers, they're, they're very tight.
Uh, and when you see relativelylow net returns like this, uh,
they have a tendency to cover ownerwithdrawals and principle payments
(04:51):
before, uh, they purchase a machinery.
That's just a natural.
Way to, way to think about cash flow.
Uh, and, and usually there's notenough cash flow left over, uh, you
know, to seriously consider, uh,buying, buying, uh, machinery in 2026.
Uh, that was also the case in 2025.
And so this index has been relativelylow, uh, for the last 18 months.
(05:13):
It's, it's been really, uh, it's reallybeen really, uh, arranging for about
50 to 60, uh, for the last 18 months.
And is there an expectation that thesituation could change in a short term?
It would take a substantially higherprices than what we're seeing right now.
Uh, it would probably, uh, if youlook at something like the IFR
and price distribution tool, whichkind looks at the probability
(05:33):
of prices, prices would probablyhave to be in that upper quartile.
Mm-hmm.
There's a probability, 25%chance of prices could be high
enough that you'd see, uh, moreinterest in, in buying machinery.
Mm-hmm.
And the cost production of the situation.
Yeah.
Obviously that thatsituation's actually worse.
Mm-hmm.
Uh, you know, since the war andit wasn't too good before that.
(05:53):
And so break even pricesincreased a little bit.
Uh, just to give you some example, someidea of the, of, of, of the magnitude, if
somebody hadn't bought their fertilizer,uh, and, and they were buying fertilizer.
Buying quite a bit of their fertilizer,uh, under these new, new prices, uh,
breakeven price for corn would be about10 to 15, uh, cents per bushel higher.
Mm-hmm.
(06:15):
Yeah.
And that concern, uh, about costproduction shows up very clearly in
the response to the next question.
Uh, looking ahead to the nextyear, what's your biggest concern
for your farming operation?
The percentage of respondents whopointed to high input costs air
(06:35):
their top concern increased from 40.
4% to 46% this month.
Concern about input, availability alsomoved higher rising from 8% to 11%.
Michael, we are red seeing fertilizer,uh, prices moving higher because of the
(06:55):
war, which I, uh, which could direct.
Production, productioncosts, we just talking about.
Do you think these concerns arelikely to grow in the months ahead?
We know that this questionis tough because we don't
know what it will happen, but
Yeah, if you look a year ago, the,the, the, uh, the biggest concern
was input cost and it was about 40%.
(07:15):
So it certainly has grown here.
In the last, last few months,it was at 44% in February.
So not exactly a small percentage,and then a further increase in March.
I think it's gonna stayaround that 40 to 45% for the
foreseeable, foreseeable future.
And this is true for even, evenfor livestock producers because,
uh, if you know, for if youwere a, a feeder producer or.
(07:38):
Someone that finishes cattle, one ofyour big expenses, buying the, the
cattle, buying the feeders, or buyingthe calves or buying the feeders.
And, and that's included in, inaggregate input price indices.
And so, uh, and so you're, and soinput costs are gonna, input, costs
are gonna be concern for both crop andlivestock producers moving forward.
Mm-hmm.
So we can see some changes in this index.
(08:00):
Yes.
Mm-hmm.
Uh, this month survey includedquestions about inflation and
interest rate expectations.
Almost 40% of respondents expectedinflation for consumers to be above 3%.
When asked whether the USinterest rate would be lower.
(08:20):
About the same or higher12 months from now.
34% of respondents indicated that theinterest rates would be lower while 16%
said interest rates would be higher.
Uh, Michael, it seems likefarmers are still concerned about
inflation, but at the same timeexpect interest rates to move lower.
(08:42):
Uh, how do you read this results?
I, I think we're gonna continueto ask this question because
this is kind of a moving target.
I, I've heard, uh, I've heard information,um, uh, not necessarily coming outta
the Fed, but those that watch the Fed.
Very carefully that they couldreduce rates, but they could also
increase rates because they'relooking at inflation very closely.
(09:03):
That's why we put both thosequestions in there this month.
And so, uh, so we're gonna continue toask this because I, I do think you're
gonna, you're gonna see, you're gonna seesome people on both ends of the spectrum.
You know, some peopleare gonna expect lower.
That was kind of what we anticipatedlast year, uh, coming into 26.
But there's also gonna be that group, uh,that expect interest rates to be higher.
(09:23):
And this is huge, not only because,uh, uh, it impacts operating costs,
but it, it impacts asset prices.
Uh, and so it's, it's, so it's veryimportant to, to ask this question
and, and relate it to land values.
Mm-hmm.
That's another factor.
So financial concerns werealso clear in these questions.
Uh, when we asked farmers whichtype of risk they see as the biggest
(09:46):
treat to their operation, 33% pointedout financial risk followed by
marketing risk and production risk.
We have also other risks.
Could you?
Yeah.
There's also, uh.
There's also human resource or, or laborrisk, legal risk and strategic risk.
They tended to be 10% or below.
And so the big three, which is typical,uh, financial marketing and production.
(10:10):
Uh, but when we've asked this question inthe past, marketing usually is the first.
And so the fact that financials, uh, thefirst really, really is an indicator,
again of, of how tight those marginsare, particularly for the crop sector.
That's true.
Uh, and from time to time.
The monthly survey includes questionsabout leasing, farm land for solar.
(10:30):
Energy production.
In this month survey, 12% of farmerssaid that they had talk about lease and
farmland they own for solar developmentduring the preview six months.
Overall, 5% of respondents said thateither they or one of their land
landowners had signed a solar lease.
(10:52):
Michael, how should weanalyze these numbers?
Solar Lising becoming a morecommon part of the conversation
in the farmland used in the us.
Yeah, the one of the, we have a chartin the report that looks at the, looks
at the percentage that, that, thattalked to someone about solar leases
going back all the way to early 24.
And, uh, a couple of thosemonths it was close to 20%.
(11:16):
Uh, close to 20% of the respondents had,had, had been approached by somebody,
and that was before the 24 election.
Uh, and so we are really trying togauge here, at least that's one of
the things I was trying to gauge.
Did that fall off the cliff?
Uh, you know, in terms of thepercentage that had been approached,
uh, since the 20, since the 24election and no, not really.
It, it's still 12%, uh, it was 11%in, in January 25 and 12% this month.
(11:40):
And so there's still a lot of, a lotof people, uh, being approached by,
by solar companies about the potentialof, of leasing ground for solar.
One of the things that was interesting.
In the results this month, and, andwe didn't put this in the report,
but uh, uh, we, we did ask thequestion about what was the rate, and
we had a lot of different buckets.
It was all over the place.
(12:01):
And so that's one of the reasons I didn'tput in the report because it's hard to
figure out exactly what's going on there.
There was quite a few below 500.
Uh, there was quite a few above 1250.
There was about 30%.
There were above 1,250, but, but, uh,it was a very, very wide, uh, wide, uh,
(12:21):
difference between the, the high endand the low end in terms of those rates.
And I think way I interpret that.
Is that probably these solar leasesare, uh, people are being approached
in these solar leases all overthe corn belt and gray plains.
And, and if you go into areas wherethe, where the cash rent's not as
high as what it is in Indiana, youdon't need to offer a thousand dollars
(12:42):
because you compare it to the cash rent.
And so my guess, we didn't ask this, butmy guess is the lower rates are occurring
in areas, uh, that have lower rent.
Oh yes.
Makes sense.
The eastern, eastern corn belt here is,is where some of the higher rates mm-hmm.
Are occurring.
The rates over 1250, for example.
Mm-hmm.
It's kind of still a newmarket that's developing.
So many things going on.
(13:02):
Yes.
They trying to adjustaccording to each situation.
That's different.
But we, we, we'll periodically askthat question at least once a year.
We'll try to get a gauge on what'shappening in the, uh, solar leasing.
To be able to compare.
Yes.
Yeah.
So, and uh, turning to farmland values,the short term farmland value expectation
index rose from 123 to 125 in March.
(13:26):
Marking its, uh, highestreading since May, 2025.
The long-term index also moved higherthis month, rising from 150 to 159.
Respondents identify alternativeinvestments, net farm income and interest
rates as the three factors which thegreatest influence on farmland values.
(13:50):
I dunno if you have any additionalcomments in these results?
Yes.
We're actually, we're actually,I'm actually working on an article
that's comparing the characteristicsand sediment for those that expect
land values to go down in the next12 months and those that expect land
values to go up in the next 12 months.
Uh, and there's a couple things thatare very interesting, uh, and, and
(14:10):
we'll put this out as an articleon our, on our website after, after
the, uh, the April 7th release.
Uh, and, uh, essentially.
One of the things that's happening is,is if the, uh, if you're a livestock
producer, you're probably moreoptimistic about land values going up.
That's very, very clear.
Mm-hmm.
But not surprisingly, those thatexpect land values to go up are quite
(14:31):
a bit more optimistic, particularlyabout the index of current conditions.
And that's, and that's leadingthem to think, well, you know, I'm.
You know, the currentconditions aren't that bad.
So, uh, and so land values aregonna go up in the next 12 months.
If you look at the people that, thatexpect lower land values, they're
very concerned about input costs,more concerned about input costs
than the, than than the other group.
(14:53):
Uh, but they're also, but they're also,uh, really worried about net farm income.
Uh, they, they, they said NetFormincome was the most important
factor influencing, uh, land land.
Land values in their area.
And so there's just a lot ofdifference among producers.
Uh, but, uh, but because that indexoccurring conditions was a little
stronger and that index of futureexpectations was a little stronger, I
(15:16):
was not surprised to see, uh, an increasein the index, both the short term land
value index and the long term value.
Uh, long-term land index, they tendto follow, uh, those two sub indices.
Mm-hmm.
Short term obviously following index ofcurrent conditions, long-term following
that index of future expectations.
Now it is, it is important to point outthat the long-term, uh, index is down a
(15:39):
little bit from what it was in December.
Uh, uh, but it, but it went up.
It, it's quite a bit higher than whatit was both in January and February.
And so, and so that leads me tobelieve, and we're gonna get to this,
that uh, people are a little bitmore optimistic about the, uh, the
current long-term policy environment.
Mm-hmm.
That's a good spoiler for thisarticle, when to be, yeah.
(16:01):
Running.
It's in April.
This article that you were writing?
Yes, yes.
Yeah.
Nice.
So, and, and as you have done in recentmonths, we ask at producers whether
they believe the US is headed inthe right direction or on the wrong.
Track, uh, in March, 65% said thatthe country is headed in the right
(16:25):
direction up from 59% in February.
Michael, would you say that thisreinforced the improved sentiment
we saw among producers in March?
I when I saw the higher.
Index of future expectations.
I went right away to what happenedto the long-term land values and
(16:45):
what happened to this question.
And they're very consistent.
You know, if you, if you, if you'remore confident about what's going on
five years from now, you're gonna bemore confident in where land values are
heading and where the US is heading.
And so they're all veryconsistent with one another.
Uh, they, they all saw increases.
They are.
Correlator connect in some
way, and maybe that maybe those, youknow, you have, we have to circle
(17:06):
back to those bridge payments.
Maybe those bridge payments, youknow, really made a lot of difference.
Not only short term, but long term,because it really did, it really did
change how you, how they view land valueswhen you, when you see a, when you see
a, an influx of, of $35 per acre, uh,you know, you know, for, in terms of
income for, for corn and soybean, uh, youknow, uh, farm, that, that's quite a bit.
(17:27):
Uh, and, and so maybe that'salso feeds into there somehow.
Yeah, we didn't touch somuch in the export Yes.
Chart, but we also cansee some impact from that.
Yes.
Because we know that in January andFebruary happened some shipments to China.
Yes.
That's certainly positive too.
Yeah.
And, and, and as I said atthe beginning, I mean it.
It wasn't just corn prices thatwere up, it was also soybean prices.
(17:49):
Soybean prices weren't up as much.
But, uh, uh, just to give as a frame ofreference here, uh, if you look at US cash
prices for soybeans, they're up 90 centsto a dollar per bushel since January.
And, and, and you would think eventuallythat's gonna have a positive impact
on, on, on sediment and it has,
yeah, probably.
(18:10):
Um, so those are the key highlightsfrom this month's survey.
You can find the full report on ourwebsite and we, that we have included
in the link and description below.
Thanks for watching and be sure tolike, follow and subscribe so you don't
miss future reports and videos from thePurdue Center for Commercial Agriculture.
(18:30):
We hope to see you again next month.
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