Farmers more optimistic about ag economy in February

WEST LAFAYETTE, Ind. — Farmers were more optimistic about the ag economy in February, according to the latest reading of the Purdue/CME Group Ag Economy Barometer.

The reading jumped 11 points from January, continuing an upward trend. The Index of Current Conditions saw a large jump of 28 points to a reading of 137. This number has rebounded from a low of 76 points last summer.

The increased optimism was attributed to a sharp recovery in crop prices, expectations for disaster payments authorized by Congress and continued strength in the U.S. livestock sector.

“I was (surprised) at the jump in the Index of Current Conditions,” said Michael Langemeier, director of the Center for Commercial Agriculture at Purdue University. “I didn’t think it would rise quite that much.

“If you look at the Index of Future Expectations, people think there’s a different policy environment since the election and they’re more optimistic because of that.”

Sixty-two percent of survey respondents said that passing a new farm bill in 2025 is either “important,” at 25%, or “very important,” at 47%.

Trade policy was listed as a top concern, followed by crop insurance programs. Forty-eight percent of farmers believed a trade war is either likely or very likely.

“While the current outlook for U.S. agriculture has improved, farmers are closely watching trade policy and the potential for a new farm bill, both of which are key factors shaping their long-term expectations,” the report stated.

“These ongoing policy concerns will likely play a critical role in shaping producer sentiment in the months ahead.”

Other Takeaways

• The Farm Capital Investment Index jumped 11 points to a reading of 59, reaching its most positive level since May 2021.

• The Farm Financial Performance Index held steady at 110, nearly unchanged from January’s reading of 111.

• The Short-Term Farmland Value Expectations Index increased modestly to 118, a 3-point increase from January and 8 points higher than December.

• While producers remain less optimistic about farmland values than they were during the winters of 2021 and 2022, sentiment has improved compared to the more cautious outlook in late summer and early fall 2024.