Farmer Sentiment Improves as Long-Term Optimism Outweighs Tariff Concerns
Michael Langemeier and James Mintert, Purdue Center for Commercial Agriculture
A breakdown on the Purdue/CME Group Ag Economy Barometer April results can be viewed at https://purdue.ag/barometervideo. Find the audio podcast discussion for insight on this month’s sentiment at https://purdue.ag/agcast.
Farmer sentiment improved in April as the Purdue University-CME Group Ag Economy Barometer climbed 8 points to a reading of 148. The improvement in farmers’ sentiment was bolstered by increases in both the Index of Current Conditions, which rose 9 points to 141, and the Index of Future Expectations, which rose 8 points to 152. Somewhat surprisingly, this month’s improvement in farmer sentiment occurred despite ongoing trade disputes with many of U.S. agriculture’s largest trading partners, including Mexico, Canada and China. However, producers responding to the April survey overwhelmingly reported that they expect the increased use of tariffs by the U.S. to prove beneficial to the U.S. agricultural economy in the long run, which was reflected in the Future Expectations Index‘s strengthening. The April barometer survey took place from April 14-21, 2025.
The Farm Capital Investment Index at 61 was 7 points higher in April than in March, reaching the highest investment index reading since May 2021. There was a marked shift in the investment index following the November 2024 election. From May through October 2024, the investment index averaged a reading of 36, while from November 2024 through April 2025, the average index value was 54 — 50% higher than during the preceding six months. This month, one out of four respondents said it was a good time to make large investments, nearly double the percentage of respondents who said it was a good time to invest when surveyed from May through October of last year.
Although 25% of respondents this month reported that it’s a good time to invest, nearly two-thirds of producers in this month’s survey still said it was a bad time to invest, and that group’s view appears to be the driver behind weak new farm equipment sales so far in 2025. For example, the Association of Equipment Manufacturers reported that first-quarter 2025 sales of tractors over 100 horsepower declined 19% compared to 2024’s first quarter, while new combine sales fell 38% below a year earlier.
The Farm Financial Performance Index changed little in April. At a reading of 101, the index was just 1 point below a month earlier. April marked the fourth month in a row that the index was above 100, indicating that producers expect financial performance this year to equal or slightly exceed the year-ago level.
The Short-Term Farmland Value Expectations Index weakened in April to a reading of 110, which was 8 points below a month earlier. The decline in the index was primarily attributable to fewer producers reporting that they expect farmland values to increase in the year ahead, with a comparable increase in the percentage of producers saying they expect values to remain about the same.
The April survey included several questions focused on the impact of the U.S.’s tariff policy on U.S. agriculture. Although sentiment improved in April, farmers are still concerned that the U.S. government’s tariff policy will have a negative impact on farm incomes. Fifty-six percent of respondents to the April survey said they think the U.S. tariff policy will have either a negative or very negative impact on their farm’s income in 2025. In a related question, just over half (53%) of producers expect the increase in tariffs on imports to make it more difficult to obtain inputs from their suppliers this year. Producers who expect some difficulty in obtaining inputs pointed to three main areas of concern: fertilizer, parts for farm machinery and electronics and crop chemicals. Despite the concerns farmers expressed in the April survey about the impact of tariffs on farm incomes and availability of inputs for their farm operations, 70% of respondents said they expect the increased use of tariffs will, in the long run, strengthen the U.S. agricultural economy.
Wrapping Up
Farmer sentiment improved in April as farmers’ appraisal of both current conditions and their expectations for the future improved compared to March. Agricultural producers are concerned that the U.S. tariff policy will reduce farm incomes in 2025. However, in the long run, there is an expectation among a majority of producers that the U.S. tariff policy will actually benefit U.S. agriculture. Finally, just over half of producers in the April survey expressed concern about the imposition of tariffs making it more difficult to obtain inputs from their suppliers later this year. Concerns were focused on the availability of fertilizer, parts for farm machinery and electronics and crop chemicals.