November 4, 2025 • 22 mins
U.S. farmer sentiment edged slightly higher in October, with the Purdue University/CME Group Ag Economy Barometer rising 3 points to a reading of 129. The increase was fueled primarily by a rise in the Index of Current Conditions, which climbed 8 points to 130, while the Index of Future Expectations was virtually unchanged at 129, just 1 point higher than in September. Farmers’ appraisals of current conditions highlight a “tale of two economies”: Livestock producers remain highly optimistic about their farm conditions, partly supported by record-high profitability in the beef sector, while crop producers report a more pessimistic view of the current situation on their farms due to low profit margins across major crop enterprises. The barometer survey took place Oct. 13-17.
Purdue ag economists James Mintert and Michael Langemeier review the results from the October Ag Economy Barometer and give their insights into farmer sentiment and the farm economy.
The Ag Economy Barometer sentiment index is calculated each month from 400 U.S. agricultural producers’ responses to a telephone survey. Further details on the full report is available at https://purdue.edu/agbarometer. Slides and the transcript from the discussion can be found at https://purdue.ag/agcast198.
You can find the FULL video episode on our YouTube channel. Visit https://youtu.be/Ujekqgm6DQk to subscribe and watch.
Podcast provided by Purdue University's Center for Commercial Agriculture. For more economic information and insights on the Ag Economy Barometer, visit us at http://purdue.edu/commercialag.
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
(00:05):
Welcome to Purdue Commercial AgCast atPurdue University Center for Commercial
Agriculture's podcast featuringfarm management news information.
I'm your host, James MintertEmeritus professor of Agricultural
Economics here at Purdue University.
And joining me today is my colleague,Dr. Michael Langemeier, who's the
director of the Center for CommercialAgriculture and also a professor
of ag economics here at Purdue.
We're gonna review the results fromthe October 2025 Purdue University
(00:29):
-CME Group Ag Economy Barometer surveyof farmers from across the nation.
Each month we survey 400 farmersacross the U.S. to learn more about
their perspectives on the ag economy.
This month's Ag Barometer surveywas conducted from the 13th
through the 17th of October.
And Michael, the Ag EconomyBarometer Index actually
rose a little bit this month.
(00:50):
It rose three points to 129, but thatstill leaves the index 29 points lower
than it was in May, which was theindex's high point so far in 2025.
And a year ago the index was just115, so it's 14 points higher
than it was in October 2024.
And when you look At the Indexof Current Conditions and the
Index of future Expectations,they were both up this month.
(01:13):
The big mover was the CurrentCondition Index, which was up
eight points to a reading of 130.
Um, that's 16 points, however,below its 2025 peak of, uh,
146, which was back in May.
And the Future Expectation Indexwas uh, up, I think one point,
so kind of a trivial move.
And then October expectation indexwas down 35 points from its 2025
(01:35):
peak, which was also back in May.
So when you look at the change, a fairlysmall change in the barometer itself.
A bigger change in theCurrent Condition Index.
What's your take?
I, I spend quite a bit of time thinkingabout the relationship between those two
and, and there's obviously times likewe, we saw, we saw in late '24 and early
'25 where the Index are, the Index ofFuture Expectations is quite a bit higher
(01:58):
than the Index of current Conditions.
But, but the fact that they're the sametells me that the tight net return,
uh, scenario that we're currentlyin, they expect that to persist.
That's what it's telling me.
Uh, if you dig deeper, we're gonna talkmore about this, but you dig deeper
and you look at livestock and crop, uh,the crop people think their situation's
probably gonna persist for a while.
(02:19):
Uh, the livestock people, uh,similarly think their situation,
which is much different.
They, they're facing a, a much brighter,uh, brighter, uh, scenario right now.
They're expecting that to persist.
Yeah.
I, I, I agree with you, Michael.
And the other thing though that I think isinteresting is the fact that that Current
Condition Index and the Future ExpectationIndex, they're both substantially higher
(02:40):
than they were this time last year.
Yeah.
And given where we're at with respectto especially, uh, crop prices.
That's a little surprising.
And you know, you mentioned,as we're gonna talk more about
it, there is the impact of thelivestock sector showing up here.
But still it is kind of interesting.
I, I think, I think again, we, wetalked about this many times before.
I think it's that they'restill fairly confident in that
(03:02):
long run policy environment.
Uh, that the trade and tariffsituation we're in, uh, is, is,
you know, a lot of people thinkthat's gonna turn out in our favor.
Uh, and we'll talk about thathere a little bit later, but
that makes a difference, uh,particularly when you're looking at
the Index of Future Expectations.
Yeah, good point.
So looking at some of the raw responsesto questions, would you say that
your farm operation today is betteroff, worse off, or about the same
(03:23):
financially compared to a year ago?
And you know, this really kindof illustrates what's going on.
The worse off category isreally up sharply since May.
That was up two points this month, butit's 21 points higher than it was in May.
And we're at, you know, 49% of thepeople in the survey saying we're off.
So that kind of, I think,tells the tail a little bit.
And then you mentioned the differencebetween livestock and crop producers.
(03:47):
The question says over the nextfive years, or widespread good
times or bad times, more likely.
And we differentiate thatbased on livestock and crops.
On the livestock side,70% are saying good times.
And on the crop side, only 30%.
And you know, that that reallytrickles through a lot of our
results, this difference in theperspectives that people have on the
(04:08):
crop side versus the livestock side.
Yeah, it's extremely important.
And, and, and the, the, certainly the,all the indices would be down, both the,
Ag Economy Barometer and, and both ofthe, both of the sub indices would be
lower, uh, if, if the sediment wasn'treally positive for the livestock sector.
Yeah, and I think that's underappreciated.
I think it's probably worth pointingout that when we do our survey every
month, by design, this is basedon the value of farm production
(04:31):
from the US census of agriculture.
By design, uh, 19% of the people inthe survey have a beef enterprise.
Um, and when you bring in, uh, dairyand, and hogs, we wind up at about 25% of
the people have a livestock enterprise.
And that has had a big impact becausethe livestock situation is so much
different, especially on the beefside than it is in the crop side.
(04:54):
Yes.
Farm Financial PerformanceIndex dropped back 10 points
in October to a reading of 78.
Um, that puts the index 31points lower than it was in May.
And you know, it's, it's, uh, I,I'm not surprised by this, right.
I'm not either.
Uh, it looks like '26 isgonna be another tough year.
(05:16):
One of the questions we addedthis month was previous surveys.
Producers have told us overwhelminglythat they think USDA is gonna make a
market facilitation program type payment.
Uh, I think last month it was 83% saidthat was either likely or very likely,
and I think 62% said very likely.
So this month we asked if USDA providesa market facilitation payment to
(05:39):
compensate for weak commodity prices.
What will be the principle useof this payment on your farm?
And over half the people in the surveysaid they'd use it to pay down debt.
That was 53%.
Another 25% said improve theirworking capital position.
So 78%, almost eight outta 10 areprobably doing what a good farm management
advisor would tell 'em to do, right?
(06:00):
Yeah.
Both of those strategies are very logical.
We did not distinguish between payingdown operating debt, uh, paying down,
uh, you know, a non-operating debt.
But my ex, my, my guess is probably both.
Yeah.
They'll probably pay down some operatingdebt if they have, if they have
some operating debts that's gonna beleftover, uh, leftover after harvest.
Uh, and that's that by itself it'sprobably gonna improve working capital.
(06:22):
Uh, but they're probably also gonnapay some of that long term debt down.
And I know there's a lot of interestin the farm machinery industry
about what people might do if theyget a significant MFP payment.
12% said that they would investin or use that money to help
update their farm machinery.
So that's a fairly smallpercentage, but it's not zero.
Uh, and then 11% said they would use itto co help cover family living expenses.
(06:42):
So we really we're, we suspected, Ithink, from a managerial perspective
that we would see a lot of people's.
Say they were gonna pay down debt,but that's, that's a good thing I
think in terms of, of maybe, uh,improving the stability of the sector.
Um, the Farm Capital Investment Index wasa little bit of a surprise this month.
It rose nine points to a readingof 62 and that essentially
(07:03):
offset last month's decline.
Um, the percent of respondents whochose good time to invest rose to 24%.
That was up from 18% in September.
The percentage that who chose bad timeto invest fell three points of 62.
And again, some of the rise inthis index has to be attributable
to the livestock sector.
Yeah, we, I actually saw, I actually,uh, we didn't put in the report, but I
(07:25):
actually summarized it, summarized thatin the spreadsheet and the Farm Capital
Investment Index for livestock was 80.
Uh, that compares to amuch lower index for crop.
And so I definitely think thelivestock sector, uh, helped,
uh, improve this number.
Yeah, and I, I think that'swidely, uh, misunderstood.
And again, thinking about how manypeople in the survey have a significant
(07:46):
portion of their farm income comingfrom the livestock sector helps
explain these results quite a bit.
Um, little follow up question aboutfarmer shooting purchases in the
upcoming year compared to a year ago.
That's a question we ask every month,and the percentage of producers
who say it's a bad time to divesthas declined three months in a row.
Um, and they've been shifting overto the stay about the same category.
(08:08):
So that's actually sort of consistentwith what we're picking up.
Um, uh, on the investment sidea little bit in terms of the
direction, maybe not the magnitude.
Yes.
So, um, the Short -Term Farmland ValueExpectation Index at 113 was up seven
points, uh, compared to September.
And maybe more importantly, thatbroke a, a pattern of declining
(08:29):
index values going back to June.
So, you know, we've been coming downevery month and been tied pretty
closely to the margins that havebeen tightening in the crop sector.
So how do you explainthat bump bump this month?
Every month there's, there'sa couple surprises, and this
was a bit of a surprise to me.
Um, you know, particularly the shortterm, uh, you know, you, you look at, you
(08:52):
look at the net return prospects for cropproducers, they don't look any better, uh,
than they did, uh, in, uh, in Septemberor August or even July for that matter.
And so and so that's reallynot explaining it and.
And so this, this was abit of a, a head scratcher.
Now, the long term, uh, we're alsogonna talk about here, that one to me
makes some sense because, uh, one of thethings that's been going on, uh, is, is
(09:17):
people have flocked to gold and silver.
And so they flocked to physical assetsand, well land's in that category.
Uh, if you think about inflationhedge, if people are really worried
about inflation in the future, um,it's gold, silver, and, and, and land.
Farmland are the assets that peopletypically, typically invest in.
So and so, the fact that the long-termfarmland value, uh, index increased rather
(09:39):
dramatically it's not as surprising tome as the, as the short run increase.
Yeah.
The long-term index at a reading of1 61 actually jumped up 15 points.
And that matched itshighest value at 2025.
So I'm gonna, I'm gonnadisagree a little bit, Michael.
I was surprised I would've not,the fact that it went up didn't
surprise me so much that, but thefact that it matches the high value
(10:01):
of the year, that did surprise me.
Yeah.
And it's, it's a little puzzling,but I guess both of us think that it
is tied to somehow, to this I ideathat we're gonna see some inflation.
And historically farmland hasbeen a relatively good, uh.
Uh, hedge against deflation.
Yes.
Certainly viewed as a I was, yes.
You're, you're actuallymore of an expert on that.
It's certainly viewed as ahedge against inflation from
(10:24):
a really long term standpoint.
It is a good hedge, but notnecessarily in the short run.
Yeah.
Not necessarily in the short run,but, but, uh, Dr. Baker, Dr. Boehlje
and myself, along with a graduatestudent a few years back, actually
looked at whether gold and silverwas a better, uh, uh, hedge against
inflation or farmland in the long term.
And farmland actually was better.
Yeah.
Now short term, you know, it doesn't doas well explain any short term movements.
(10:46):
No.
And it also has the advantage of actuallyoffering, uh, a dividend every year.
Yes.
Unlike gold.
Yes.
Which just sits there.
Right.
So, all right.
Um, we've been asking thisquestion for a long time.
Going back to 2019, over thenext five years, do you think ag
exports are likely to increase,decrease, or remain about the same?
And there was a bit ofoptimism this month.
Uh, it's a small amount.
(11:07):
Uh, the percentages said that they expectto see exports increase rose to 51%.
That's up from 47% last month.
Um, the percentages said they,they think it's gonna decline.
Uh, changed a little.
It went to 14% from 13%.
The interesting thing, Michael,is when I look at a chart.
The line that plots the percentages,say they think exports are gonna
increase, has been increasing nowfor about, what, six months or so?
(11:32):
Uh, it's got a strong uptrend
And if you go back before the,before the, uh, uh, '24 election,
it was actually 10 points lower.
That's the bit surprising to me.
Uh,
Given, given, given what'sgoing on with everything
That's going on, that they're actuallymore optimistic regarding, uh,
exports in the next five years thanthey were before the '24 election.
I mean.
(11:53):
Exports to China have fallen off a cliff.
Yes.
I mean, that's, that's the big one.
There's zero for soybeans right now.
Yeah.
So that's, that's, yeah.
This is a surprising result, butit, it does speak to the attitude of
Yes.
what people are thinking about out there.
Um, and the follow up question we'vebeen asking just recently, I guess
we started asking this in April.
Do you expect the increased use of tariffsby the U.S. to strengthen or weaken
(12:15):
the U.S. ag economy in the long run?
Uh, this month, 58% said strengthen.
That's up from last month.
Last month in September it was 51%.
Um, in June it was 63%.
In the spring it was 70%, sothere maybe been a fall off in
confidence since the spring.
And then what I'm gonna call theuncertainty factor is definitely
(12:36):
up compared to the spring.
And the spring only 8% saidthey were uncertain about the
out come of the tariff policy.
This month that's doubled at 16%.
It's down slightly compared to last month.
Last month was 19%, but when you goback to the spring versus now, the
uncertainty factor has definitely risen.
Yeah.
You point out a very important pointhere is the last two months, that
(12:58):
uncertainty index has double compared towhat it was in April, May, and and June.
And this is a question I definitely thinkwe should have asked again in November
and December, uh, to see if this changes.
Yeah.
Um, we've been asking this questionI think for a long time as well.
Looking at it next year, whatare your biggest concerns
for your farming operation?
Not a lot of change here.
(13:18):
You know, higher input cost is stillthe number one choice at this month.
41% of the people in the surveysaid that was their top concern.
28% said lower crop and livestock prices.
Those are both a little higherthan they were at the beginning
of the year, but not a big change.
Um, last month we did highlight thefact that we saw a bump in the people
(13:39):
worried about the availability of inputs.
Um, it was up around 15%, which wasthe highest we'd seen in a long time.
This month that dropped back to 9%.
And we wondered last month ifthat 15% was kind of a blip.
Based on this month'sresults, maybe it is a blip.
Do you agree with that?
Yes, it does look like it is.
(13:59):
'cause it's no different thanthe January number, 8%, 9%.
They're not significantly different.
One of the things that's alwaysinteresting about when you, when
you look at the, the answer to thesequestions, uh, when you read the farm
press, for example, and, and, and you.
And you listen to podcasts,uh, related to, related to the,
related to the farm community.
They, they tend to focus on policy.
(14:19):
And I just wanna note here, this hasn'tchanged, uh, all year, but only about 11%.
Uh, their biggest concern is policy.
Uh, so that, that, that tells me thatthey're pretty confident that the policy
makers are probably gonna come through.
You know, if, if, if, if they, if we needsome additional, additional government
payments or something like that.
They're, they're worriedabout the fundamentals.
(14:41):
Uh, and the fundamentals to me arethe, where, where are prices relatively
low for the crop sector, relativelyhigh for the livestock sector.
And then those high input costs that, thatare with us, uh, ever since COVID ended.
So I, I find that fascinatingthat they, here they really
focus on the fundamentals.
Yeah.
And I, we've talked about this before.
I think we've both been a little bitsurprised at the fact that how few
(15:03):
people focused on the policy side.
We've got it broken up intotwo questions or two responses.
One's farm policy, and this monthit was only 6% and that's about
where it's been all year long.
Environmental policy was a 5%.
That's a little lower than itwas at the beginning of the year.
It was 8%.
It's been as high as nine.
So that's a small percentage, and yet.
(15:24):
You know, in an era of low prices on thecrop side, farm support coming out of
farm policy is pretty doggone important.
And so it is surprising that we don'tget more people focused on that.
Um, we added some extra questionsthis month basically to try and
learn a little bit more aboutwhat people are thinking about.
(15:45):
In response to lower prices for the crops,and more specifically in this case, corn.
So the first question we asked was, doesyour farm use advice from an agronomic
consultant when making decisions?
And 52% said yes, 48%.
No.
We were talking aboutthis before the podcast.
I was a little surprised at the 52% Iwould expect a somewhat higher number.
(16:05):
I didn't expect a hundred percent,obviously, but I thought a little
higher than basically a coin flip.
I think there's a couple things going onhere as, as we were talking about before.
One of them is, uh, you know, who dothey call an agronomic consultant?
Is that a full-time person, uh, thatcomes to the farm and, and helps them,
uh, you know, for, for consulting fee?
Or, or, or is that a person from theco-op, uh, that's maybe providing that
(16:28):
service for very low cost or even free?
Are they both consideredagronomic consultants?
And so we're, we're a little vaguewith this question, but also we
gotta remember we've got quite a few.
Uh, mid-size sole proprietors inhere that maybe probably don't have
a consultant from either source.
Yeah, that's a good point.
Um, yeah, we'll, we'll, we'll probably askthis again at some point in the future.
(16:49):
I, I, I'm looking, it may be phrasingthe question differently would matter.
And we also asked a question relatedto financial ratios and it was about
half the people use financial ratios.
Again, there we'reprobably a little vague.
My guess is as, as, uh, folks use thecurrent ratio and debt to asset ratio
a lot more than the profit margin.
Um, but, but, uh, about 50% used, uh,uh, financial ratios in their business.
(17:12):
So then following up that agronomicquestion, we said, what changes,
if any, will your farm make in 2026to respond to low corn prices and.
30%. So roughly three outta 10,said they were gonna make no change.
Um, the next was reduce phosphorus rates.
And, uh, we only asked aboutphosphorus, not, uh, not potash.
(17:37):
My interpretation is that was probablylike reduce dry fertilizer rates.
Yeah.
Or, or reduce reduce rate rates onfertilizers that we don't necessarily
have to apply every single year.
That was chosen by 29%.
So almost the same as no change, adoptlower cost seed traits was chosen by
27%, so again, almost three outta 10.
(17:57):
And then the two that really dropped backquite a bit, reduced nitrogen rates was
only chosen by 16% and reduced seedingrates, uh, was only chosen by 11%.
So what were your, what were yourexpectations coming in on this question?
I, I thought the changes would be a littlesmaller, uh, than what we're seeing here.
(18:18):
But having said that, I think it'svery logical that people think about
lowering their, their seed costversus traits and choosing traits and
varieties rather than the seeding rates.
That makes a lot of sense to me.
Uh, reducing sheet seating ratescould, uh, the benefit there
might, might, uh, may not be asbig as the cost, uh, quite frankly.
And so that one's always a little tricky.
Uh, and, and it was very logical tome that, uh, the p rates, a lot more
(18:41):
people thought, uh, thought about, uh,reducing p rates that, that end rates.
And, uh, and, and perhaps one of thethings that's going on here when you
look at the fertilizer results isfertilizer prices are relatively high
right now, particularly for phosphorus,but also nitrogen compared to, uh,
last year at this time, it's higher.
And so I think that is in people'sminds, is there anything I can do,
(19:05):
uh, to try to reduce my fertilizercosts, uh, you know, this year?
And, and, uh, uh, and they'reindicating that they're gonna
look at those rates carefully.
Yeah.
And I guess my interpretationof this question is not that
necessarily people are gonna followthrough on all these things, but
rather they're thinking about 'em.
You're thinking about that.
They're thinking about waysthat I could do something to
reduce my cost per bushels.
(19:25):
You get that break, even, evena di dime or 20 cents would
make a lot of difference.
Yeah.
And so I, I suspect a lot of thefolks that, that responded to
this question, probably theseare things we're thinking about.
They probably haven't made a finaldecision on what they're gonna do here.
So, um, the question we've been askingsince July is, would you say that things
in the US today are generally headed inthe right direction or on the wrong track?
(19:46):
And boy, if we've got a question thatwe got consistent responses to, it's
this one 72% said right direction.
There's been almost nochange in this, right?
Last month it was 71%.
In August it was 69%, and in Julyit was 74% saying right direction.
So again, you thinking back tothat, um, some of the things people
(20:07):
are thinking about with respectto looking ahead, uh, Index of, of
Future Expectations, for example.
People are on board with thepolicy direction that's going on.
Uh, we hear a lot in thefarm press and recently the
non-farm press about complaints.
But fundamentally, people think thisis gonna turn out okay in the long run.
(20:30):
In the short run, it seems likethe complaints that we're picking
up are revolving around the needfor something like the MFP program.
You agree?
It has been consistent all, all year.
We've asked questions about whetherthey expect MFP payments, uh,
a few months ago they said yes.
And so it's been veryconsistent throughout the year.
Uh, and, and this question we'vebeen asking since July, like you
(20:50):
said, is extremely consistent.
I, I don't think that's necessarilythe case with the non-ag community.
I think the non, you know, thishas been asked of the broader
US and I think there's morevariability, uh, when you ask that.
But, but for the ag community, veryconsistent response to this question.
It if probably the most consistentthing that we've done, right?
Yeah.
I mean, kind of a policy zone like this.
(21:10):
So, you know, when we think aboutresponses, we've got four months of
data now that's a little over six,well, roughly 1600 responses, and
they just haven't changed at all.
So that's, that's kind of interesting.
Well, that wraps up the highlights ofthis month's, uh, ag Barometer survey.
You can get the full report on ourwebsite, which is purdue.edu/ag barometer.
And of course, if you're watchingthis on, on YouTube, you can also get
(21:33):
more details on a regular basis fromPurdue Commercial AgCast, which is
available on major podcast providersand at purdue.edu/commercial ag.
I wanna emphasize, you don't have tosubscribe to this on a podcast provider.
You can simply, uh, listen to thepodcast on the website itself.
So with that, I want to thankmy colleague, Dr. Michael
Langemeier for joining me today.
(21:53):
And on behalf of the Center forCommercial Agriculture, I'm James Mintert.
Welcome to Purdue Commercial AgCast atPurdue University Center for Commercial
Agriculture's podcast featuringfarm management news information.
I'm your host, James MintertEmeritus professor of Agricultural
Economics here at Purdue University.
And joining me today is my colleague,Dr. Michael Langemeier, who's the
director of the Center for CommercialAgriculture and also a professor
of ag economics here at Purdue.
We're gonna review the results fromthe October 2025 Purdue University
(00:29):
-CME Group Ag Economy Barometer surveyof farmers from across the nation.
Each month we survey 400 farmersacross the U.S. to learn more about
their perspectives on the ag economy.
This month's Ag Barometer surveywas conducted from the 13th
through the 17th of October.
And Michael, the Ag EconomyBarometer Index actually
rose a little bit this month.
(00:50):
It rose three points to 129, but thatstill leaves the index 29 points lower
than it was in May, which was theindex's high point so far in 2025.
And a year ago the index was just115, so it's 14 points higher
than it was in October 2024.
And when you look At the Indexof Current Conditions and the
Index of future Expectations,they were both up this month.
(01:13):
The big mover was the CurrentCondition Index, which was up
eight points to a reading of 130.
Um, that's 16 points, however,below its 2025 peak of, uh,
146, which was back in May.
And the Future Expectation Indexwas uh, up, I think one point,
so kind of a trivial move.
And then October expectation indexwas down 35 points from its 2025
(01:35):
peak, which was also back in May.
So when you look at the change, a fairlysmall change in the barometer itself.
A bigger change in theCurrent Condition Index.
What's your take?
I, I spend quite a bit of time thinkingabout the relationship between those two
and, and there's obviously times likewe, we saw, we saw in late '24 and early
'25 where the Index are, the Index ofFuture Expectations is quite a bit higher
(01:58):
than the Index of current Conditions.
But, but the fact that they're the sametells me that the tight net return,
uh, scenario that we're currentlyin, they expect that to persist.
That's what it's telling me.
Uh, if you dig deeper, we're gonna talkmore about this, but you dig deeper
and you look at livestock and crop, uh,the crop people think their situation's
probably gonna persist for a while.
(02:19):
Uh, the livestock people, uh,similarly think their situation,
which is much different.
They, they're facing a, a much brighter,uh, brighter, uh, scenario right now.
They're expecting that to persist.
Yeah.
I, I, I agree with you, Michael.
And the other thing though that I think isinteresting is the fact that that Current
Condition Index and the Future ExpectationIndex, they're both substantially higher
(02:40):
than they were this time last year.
Yeah.
And given where we're at with respectto especially, uh, crop prices.
That's a little surprising.
And you know, you mentioned,as we're gonna talk more about
it, there is the impact of thelivestock sector showing up here.
But still it is kind of interesting.
I, I think, I think again, we, wetalked about this many times before.
I think it's that they'restill fairly confident in that
(03:02):
long run policy environment.
Uh, that the trade and tariffsituation we're in, uh, is, is,
you know, a lot of people thinkthat's gonna turn out in our favor.
Uh, and we'll talk about thathere a little bit later, but
that makes a difference, uh,particularly when you're looking at
the Index of Future Expectations.
Yeah, good point.
So looking at some of the raw responsesto questions, would you say that
your farm operation today is betteroff, worse off, or about the same
(03:23):
financially compared to a year ago?
And you know, this really kindof illustrates what's going on.
The worse off category isreally up sharply since May.
That was up two points this month, butit's 21 points higher than it was in May.
And we're at, you know, 49% of thepeople in the survey saying we're off.
So that kind of, I think,tells the tail a little bit.
And then you mentioned the differencebetween livestock and crop producers.
(03:47):
The question says over the nextfive years, or widespread good
times or bad times, more likely.
And we differentiate thatbased on livestock and crops.
On the livestock side,70% are saying good times.
And on the crop side, only 30%.
And you know, that that reallytrickles through a lot of our
results, this difference in theperspectives that people have on the
(04:08):
crop side versus the livestock side.
Yeah, it's extremely important.
And, and, and the, the, certainly the,all the indices would be down, both the,
Ag Economy Barometer and, and both ofthe, both of the sub indices would be
lower, uh, if, if the sediment wasn'treally positive for the livestock sector.
Yeah, and I think that's underappreciated.
I think it's probably worth pointingout that when we do our survey every
month, by design, this is basedon the value of farm production
(04:31):
from the US census of agriculture.
By design, uh, 19% of the people inthe survey have a beef enterprise.
Um, and when you bring in, uh, dairyand, and hogs, we wind up at about 25% of
the people have a livestock enterprise.
And that has had a big impact becausethe livestock situation is so much
different, especially on the beefside than it is in the crop side.
(04:54):
Yes.
Farm Financial PerformanceIndex dropped back 10 points
in October to a reading of 78.
Um, that puts the index 31points lower than it was in May.
And you know, it's, it's, uh, I,I'm not surprised by this, right.
I'm not either.
Uh, it looks like '26 isgonna be another tough year.
(05:16):
One of the questions we addedthis month was previous surveys.
Producers have told us overwhelminglythat they think USDA is gonna make a
market facilitation program type payment.
Uh, I think last month it was 83% saidthat was either likely or very likely,
and I think 62% said very likely.
So this month we asked if USDA providesa market facilitation payment to
(05:39):
compensate for weak commodity prices.
What will be the principle useof this payment on your farm?
And over half the people in the surveysaid they'd use it to pay down debt.
That was 53%.
Another 25% said improve theirworking capital position.
So 78%, almost eight outta 10 areprobably doing what a good farm management
advisor would tell 'em to do, right?
(06:00):
Yeah.
Both of those strategies are very logical.
We did not distinguish between payingdown operating debt, uh, paying down,
uh, you know, a non-operating debt.
But my ex, my, my guess is probably both.
Yeah.
They'll probably pay down some operatingdebt if they have, if they have
some operating debts that's gonna beleftover, uh, leftover after harvest.
Uh, and that's that by itself it'sprobably gonna improve working capital.
(06:22):
Uh, but they're probably also gonnapay some of that long term debt down.
And I know there's a lot of interestin the farm machinery industry
about what people might do if theyget a significant MFP payment.
12% said that they would investin or use that money to help
update their farm machinery.
So that's a fairly smallpercentage, but it's not zero.
Uh, and then 11% said they would use itto co help cover family living expenses.
(06:42):
So we really we're, we suspected, Ithink, from a managerial perspective
that we would see a lot of people's.
Say they were gonna pay down debt,but that's, that's a good thing I
think in terms of, of maybe, uh,improving the stability of the sector.
Um, the Farm Capital Investment Index wasa little bit of a surprise this month.
It rose nine points to a readingof 62 and that essentially
(07:03):
offset last month's decline.
Um, the percent of respondents whochose good time to invest rose to 24%.
That was up from 18% in September.
The percentage that who chose bad timeto invest fell three points of 62.
And again, some of the rise inthis index has to be attributable
to the livestock sector.
Yeah, we, I actually saw, I actually,uh, we didn't put in the report, but I
(07:25):
actually summarized it, summarized thatin the spreadsheet and the Farm Capital
Investment Index for livestock was 80.
Uh, that compares to amuch lower index for crop.
And so I definitely think thelivestock sector, uh, helped,
uh, improve this number.
Yeah, and I, I think that'swidely, uh, misunderstood.
And again, thinking about how manypeople in the survey have a significant
(07:46):
portion of their farm income comingfrom the livestock sector helps
explain these results quite a bit.
Um, little follow up question aboutfarmer shooting purchases in the
upcoming year compared to a year ago.
That's a question we ask every month,and the percentage of producers
who say it's a bad time to divesthas declined three months in a row.
Um, and they've been shifting overto the stay about the same category.
(08:08):
So that's actually sort of consistentwith what we're picking up.
Um, uh, on the investment sidea little bit in terms of the
direction, maybe not the magnitude.
Yes.
So, um, the Short -Term Farmland ValueExpectation Index at 113 was up seven
points, uh, compared to September.
And maybe more importantly, thatbroke a, a pattern of declining
(08:29):
index values going back to June.
So, you know, we've been coming downevery month and been tied pretty
closely to the margins that havebeen tightening in the crop sector.
So how do you explainthat bump bump this month?
Every month there's, there'sa couple surprises, and this
was a bit of a surprise to me.
Um, you know, particularly the shortterm, uh, you know, you, you look at, you
(08:52):
look at the net return prospects for cropproducers, they don't look any better, uh,
than they did, uh, in, uh, in Septemberor August or even July for that matter.
And so and so that's reallynot explaining it and.
And so this, this was abit of a, a head scratcher.
Now, the long term, uh, we're alsogonna talk about here, that one to me
makes some sense because, uh, one of thethings that's been going on, uh, is, is
(09:17):
people have flocked to gold and silver.
And so they flocked to physical assetsand, well land's in that category.
Uh, if you think about inflationhedge, if people are really worried
about inflation in the future, um,it's gold, silver, and, and, and land.
Farmland are the assets that peopletypically, typically invest in.
So and so, the fact that the long-termfarmland value, uh, index increased rather
(09:39):
dramatically it's not as surprising tome as the, as the short run increase.
Yeah.
The long-term index at a reading of1 61 actually jumped up 15 points.
And that matched itshighest value at 2025.
So I'm gonna, I'm gonnadisagree a little bit, Michael.
I was surprised I would've not,the fact that it went up didn't
surprise me so much that, but thefact that it matches the high value
(10:01):
of the year, that did surprise me.
Yeah.
And it's, it's a little puzzling,but I guess both of us think that it
is tied to somehow, to this I ideathat we're gonna see some inflation.
And historically farmland hasbeen a relatively good, uh.
Uh, hedge against deflation.
Yes.
Certainly viewed as a I was, yes.
You're, you're actuallymore of an expert on that.
It's certainly viewed as ahedge against inflation from
(10:24):
a really long term standpoint.
It is a good hedge, but notnecessarily in the short run.
Yeah.
Not necessarily in the short run,but, but, uh, Dr. Baker, Dr. Boehlje
and myself, along with a graduatestudent a few years back, actually
looked at whether gold and silverwas a better, uh, uh, hedge against
inflation or farmland in the long term.
And farmland actually was better.
Yeah.
Now short term, you know, it doesn't doas well explain any short term movements.
(10:46):
No.
And it also has the advantage of actuallyoffering, uh, a dividend every year.
Yes.
Unlike gold.
Yes.
Which just sits there.
Right.
So, all right.
Um, we've been asking thisquestion for a long time.
Going back to 2019, over thenext five years, do you think ag
exports are likely to increase,decrease, or remain about the same?
And there was a bit ofoptimism this month.
Uh, it's a small amount.
(11:07):
Uh, the percentages said that they expectto see exports increase rose to 51%.
That's up from 47% last month.
Um, the percentages said they,they think it's gonna decline.
Uh, changed a little.
It went to 14% from 13%.
The interesting thing, Michael,is when I look at a chart.
The line that plots the percentages,say they think exports are gonna
increase, has been increasing nowfor about, what, six months or so?
(11:32):
Uh, it's got a strong uptrend
And if you go back before the,before the, uh, uh, '24 election,
it was actually 10 points lower.
That's the bit surprising to me.
Uh,
Given, given, given what'sgoing on with everything
That's going on, that they're actuallymore optimistic regarding, uh,
exports in the next five years thanthey were before the '24 election.
I mean.
(11:53):
Exports to China have fallen off a cliff.
Yes.
I mean, that's, that's the big one.
There's zero for soybeans right now.
Yeah.
So that's, that's, yeah.
This is a surprising result, butit, it does speak to the attitude of
Yes.
what people are thinking about out there.
Um, and the follow up question we'vebeen asking just recently, I guess
we started asking this in April.
Do you expect the increased use of tariffsby the U.S. to strengthen or weaken
(12:15):
the U.S. ag economy in the long run?
Uh, this month, 58% said strengthen.
That's up from last month.
Last month in September it was 51%.
Um, in June it was 63%.
In the spring it was 70%, sothere maybe been a fall off in
confidence since the spring.
And then what I'm gonna call theuncertainty factor is definitely
(12:36):
up compared to the spring.
And the spring only 8% saidthey were uncertain about the
out come of the tariff policy.
This month that's doubled at 16%.
It's down slightly compared to last month.
Last month was 19%, but when you goback to the spring versus now, the
uncertainty factor has definitely risen.
Yeah.
You point out a very important pointhere is the last two months, that
(12:58):
uncertainty index has double compared towhat it was in April, May, and and June.
And this is a question I definitely thinkwe should have asked again in November
and December, uh, to see if this changes.
Yeah.
Um, we've been asking this questionI think for a long time as well.
Looking at it next year, whatare your biggest concerns
for your farming operation?
Not a lot of change here.
(13:18):
You know, higher input cost is stillthe number one choice at this month.
41% of the people in the surveysaid that was their top concern.
28% said lower crop and livestock prices.
Those are both a little higherthan they were at the beginning
of the year, but not a big change.
Um, last month we did highlight thefact that we saw a bump in the people
(13:39):
worried about the availability of inputs.
Um, it was up around 15%, which wasthe highest we'd seen in a long time.
This month that dropped back to 9%.
And we wondered last month ifthat 15% was kind of a blip.
Based on this month'sresults, maybe it is a blip.
Do you agree with that?
Yes, it does look like it is.
(13:59):
'cause it's no different thanthe January number, 8%, 9%.
They're not significantly different.
One of the things that's alwaysinteresting about when you, when
you look at the, the answer to thesequestions, uh, when you read the farm
press, for example, and, and, and you.
And you listen to podcasts,uh, related to, related to the,
related to the farm community.
They, they tend to focus on policy.
(14:19):
And I just wanna note here, this hasn'tchanged, uh, all year, but only about 11%.
Uh, their biggest concern is policy.
Uh, so that, that, that tells me thatthey're pretty confident that the policy
makers are probably gonna come through.
You know, if, if, if, if they, if we needsome additional, additional government
payments or something like that.
They're, they're worriedabout the fundamentals.
(14:41):
Uh, and the fundamentals to me arethe, where, where are prices relatively
low for the crop sector, relativelyhigh for the livestock sector.
And then those high input costs that, thatare with us, uh, ever since COVID ended.
So I, I find that fascinatingthat they, here they really
focus on the fundamentals.
Yeah.
And I, we've talked about this before.
I think we've both been a little bitsurprised at the fact that how few
(15:03):
people focused on the policy side.
We've got it broken up intotwo questions or two responses.
One's farm policy, and this monthit was only 6% and that's about
where it's been all year long.
Environmental policy was a 5%.
That's a little lower than itwas at the beginning of the year.
It was 8%.
It's been as high as nine.
So that's a small percentage, and yet.
(15:24):
You know, in an era of low prices on thecrop side, farm support coming out of
farm policy is pretty doggone important.
And so it is surprising that we don'tget more people focused on that.
Um, we added some extra questionsthis month basically to try and
learn a little bit more aboutwhat people are thinking about.
(15:45):
In response to lower prices for the crops,and more specifically in this case, corn.
So the first question we asked was, doesyour farm use advice from an agronomic
consultant when making decisions?
And 52% said yes, 48%.
No.
We were talking aboutthis before the podcast.
I was a little surprised at the 52% Iwould expect a somewhat higher number.
(16:05):
I didn't expect a hundred percent,obviously, but I thought a little
higher than basically a coin flip.
I think there's a couple things going onhere as, as we were talking about before.
One of them is, uh, you know, who dothey call an agronomic consultant?
Is that a full-time person, uh, thatcomes to the farm and, and helps them,
uh, you know, for, for consulting fee?
Or, or, or is that a person from theco-op, uh, that's maybe providing that
(16:28):
service for very low cost or even free?
Are they both consideredagronomic consultants?
And so we're, we're a little vaguewith this question, but also we
gotta remember we've got quite a few.
Uh, mid-size sole proprietors inhere that maybe probably don't have
a consultant from either source.
Yeah, that's a good point.
Um, yeah, we'll, we'll, we'll probably askthis again at some point in the future.
(16:49):
I, I, I'm looking, it may be phrasingthe question differently would matter.
And we also asked a question relatedto financial ratios and it was about
half the people use financial ratios.
Again, there we'reprobably a little vague.
My guess is as, as, uh, folks use thecurrent ratio and debt to asset ratio
a lot more than the profit margin.
Um, but, but, uh, about 50% used, uh,uh, financial ratios in their business.
(17:12):
So then following up that agronomicquestion, we said, what changes,
if any, will your farm make in 2026to respond to low corn prices and.
30%. So roughly three outta 10,said they were gonna make no change.
Um, the next was reduce phosphorus rates.
And, uh, we only asked aboutphosphorus, not, uh, not potash.
(17:37):
My interpretation is that was probablylike reduce dry fertilizer rates.
Yeah.
Or, or reduce reduce rate rates onfertilizers that we don't necessarily
have to apply every single year.
That was chosen by 29%.
So almost the same as no change, adoptlower cost seed traits was chosen by
27%, so again, almost three outta 10.
(17:57):
And then the two that really dropped backquite a bit, reduced nitrogen rates was
only chosen by 16% and reduced seedingrates, uh, was only chosen by 11%.
So what were your, what were yourexpectations coming in on this question?
I, I thought the changes would be a littlesmaller, uh, than what we're seeing here.
(18:18):
But having said that, I think it'svery logical that people think about
lowering their, their seed costversus traits and choosing traits and
varieties rather than the seeding rates.
That makes a lot of sense to me.
Uh, reducing sheet seating ratescould, uh, the benefit there
might, might, uh, may not be asbig as the cost, uh, quite frankly.
And so that one's always a little tricky.
Uh, and, and it was very logical tome that, uh, the p rates, a lot more
(18:41):
people thought, uh, thought about, uh,reducing p rates that, that end rates.
And, uh, and, and perhaps one of thethings that's going on here when you
look at the fertilizer results isfertilizer prices are relatively high
right now, particularly for phosphorus,but also nitrogen compared to, uh,
last year at this time, it's higher.
And so I think that is in people'sminds, is there anything I can do,
(19:05):
uh, to try to reduce my fertilizercosts, uh, you know, this year?
And, and, uh, uh, and they'reindicating that they're gonna
look at those rates carefully.
Yeah.
And I guess my interpretationof this question is not that
necessarily people are gonna followthrough on all these things, but
rather they're thinking about 'em.
You're thinking about that.
They're thinking about waysthat I could do something to
reduce my cost per bushels.
(19:25):
You get that break, even, evena di dime or 20 cents would
make a lot of difference.
Yeah.
And so I, I suspect a lot of thefolks that, that responded to
this question, probably theseare things we're thinking about.
They probably haven't made a finaldecision on what they're gonna do here.
So, um, the question we've been askingsince July is, would you say that things
in the US today are generally headed inthe right direction or on the wrong track?
(19:46):
And boy, if we've got a question thatwe got consistent responses to, it's
this one 72% said right direction.
There's been almost nochange in this, right?
Last month it was 71%.
In August it was 69%, and in Julyit was 74% saying right direction.
So again, you thinking back tothat, um, some of the things people
(20:07):
are thinking about with respectto looking ahead, uh, Index of, of
Future Expectations, for example.
People are on board with thepolicy direction that's going on.
Uh, we hear a lot in thefarm press and recently the
non-farm press about complaints.
But fundamentally, people think thisis gonna turn out okay in the long run.
(20:30):
In the short run, it seems likethe complaints that we're picking
up are revolving around the needfor something like the MFP program.
You agree?
It has been consistent all, all year.
We've asked questions about whetherthey expect MFP payments, uh,
a few months ago they said yes.
And so it's been veryconsistent throughout the year.
Uh, and, and this question we'vebeen asking since July, like you
(20:50):
said, is extremely consistent.
I, I don't think that's necessarilythe case with the non-ag community.
I think the non, you know, thishas been asked of the broader
US and I think there's morevariability, uh, when you ask that.
But, but for the ag community, veryconsistent response to this question.
It if probably the most consistentthing that we've done, right?
Yeah.
I mean, kind of a policy zone like this.
(21:10):
So, you know, when we think aboutresponses, we've got four months of
data now that's a little over six,well, roughly 1600 responses, and
they just haven't changed at all.
So that's, that's kind of interesting.
Well, that wraps up the highlights ofthis month's, uh, ag Barometer survey.
You can get the full report on ourwebsite, which is purdue.edu/ag barometer.
And of course, if you're watchingthis on, on YouTube, you can also get
(21:33):
more details on a regular basis fromPurdue Commercial AgCast, which is
available on major podcast providersand at purdue.edu/commercial ag.
I wanna emphasize, you don't have tosubscribe to this on a podcast provider.
You can simply, uh, listen to thepodcast on the website itself.
So with that, I want to thankmy colleague, Dr. Michael
Langemeier for joining me today.
(21:53):
And on behalf of the Center forCommercial Agriculture, I'm James Mintert.
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