---

Audio Transcript

James Mintert: Welcome to Purdue Commercial icast at Purdue University Center for Commercial Agriculture’s Podcast featuring farm management news and information. I’m your host today, James Mintert, Emeritus Professor of Agricultural Economics at Purdue University. And joining me today is my colleague, Dr. Michael Langemeier who’s the Director of the Center for Commercial Agriculture and also Professor of Agricultural Economics here at Purdue.

We’re gonna review the results from the September 2025 Purdue University -CME Group Ag Economy Barometer Survey of farmers from across the nation. Each month we survey 400 farmers across the U.S. to learn more about their perspectives on the ag economy. This month’s Ag Barometer survey was conducted from the 15th through the 19th of September.

[00:00:44] Overview of Ag Barometer Results

James Mintert: And Michael, the barometer actually rose a point to 126. I don’t think that one point change is significant in any way, but it leaves that index, 32 points lower than it was back in May, and that was the index’s high point so far in 2025. And a year ago, the index was just 88, so it’s 38 points higher than it was a year ago. So two contrasting things that were lower than we were back in May, but we are still significantly higher than we were a year ago this time. What do you make of that?

Michael Langemeier: Um, I, I think we’re still, we’re still relatively high after the election. I think that’s part of it. We’re also gonna talk more about this, but I think, I think one of the things that’s keeping the index up is, is livestock. I mean, about 25 to 30% of the, of the survey respondents are primary livestock producers is even a higher percent that have livestock, and I think that’s helping keep the index up.

James Mintert: Yeah, I, I agree with that. And we’ve been talking about that for the last few months, and that continues to be the case.

The Index of Current Conditions fell seven points to 122. That’s 24 points below its peak back in May, for 2025, which was 146. And the Future Expectation Index actually rose a little bit, rose five points to 128, but that’s after a 16 point drop in August. The September Future Expectation Index was down 36 points from its 2025 peak in May. If you look at what’s taken place there is a little bit of a surprise here in the sense that that Future Expectation Index rose a little bit. Or that was unexpected, at least by me.

Michael Langemeier: That was unexpected, but I think it is related to some policy questions that we’re gonna discuss here. I think there’s some, there’s some policy optimism, if you will, that’s keeping that, that’s keeping that index up.

James Mintert: And I don’t wanna overplay the fact that it rose five points. Maybe the more significant note is that it’s still down relative to where it was in July.

Michael Langemeier: It makes more sense to me now that it’s higher than the Index of Current Conditions. I think the, I think the Index of Current Conditions are reflecting the fact that we have really low crop prices.

James Mintert: Yeah. Good point.

So, you know, it’s useful to look at some of the raw questions, not just the indexes themselves. And looking ahead, do you think it’s more likely that U.S. ag during the next five years will have widespread good times or widespread bad times? And if you look at it, the percentage of producers who expect good times is down 15 points since May. While the percentage expecting bad times has climbed 12 points since May. So it’s really flipped in in a big way. In fact, those two, uh, response rates are actually getting pretty darn close to each other with 38% saying good times, 32% saying bad times.

And if you look at, um, the, the related question over the next five years are widespread good times or bad times more likely for the livestock or the crop sector. This kind of reinforces the point you were making earlier. People are much more optimistic about what’s gonna take place in the livestock sector. 64%, uh, same good times for the livestock sector and only 25% for crops.

Michael Langemeier: Yeah, it’s a 40 point difference. And, and, uh, uh, we’re gonna go ahead and share the slides that we’re, we’re talking about here today, but that, that’s extremely wide. I mean, we, we sometimes they’re similar and sometimes they’re like 10 points apart. Uh, maybe 15 points apart. But 40 points, uh, just, just huge difference. And the way they way they think about the next five years.

James Mintert: And you know, if you look at it on a chart, that line for livestock good times is actually trending up in a significant way over these last roughly two years. Whereas the crop side has been sideways to down. Uh, and in fact, one of the lowest readings we’ve gotten going back to, um. When we started collecting data in 2015, I think the only time it was lower was a year ago. This time in September 24th.

Michael Langemeier: Yeah. Excellent point. I mean, it, it, it hasn’t been this low really since, since we started collecting data in late 2015.

James Mintert: Yeah, it, it’s record low and so I, that tells you how dire things are. I think for crop producers, at least in the short run.

If a trade war leads to lower prices for U.S. ag products, how likely do you think it is that farmers will receive compensation? Similar to 2019’s Market Facilitation Program, which is also referred to commonly as the MFP program. 83% of producers expect a program is similar to 2019’s MFP, to provide a backstop to farm incomes. And 62% said very likely, 21% said likely. We’ve asked this question before, the percentages we got back in the spring when we asked this were positive, but not this positive. People are really convinced now.

Michael Langemeier: Yes. And I think there has been some discussion about policymakers that this is probably gonna happen, uh, whether there’ll be similar, who knows?

James Mintert: Yeah. And if you think about it though, this is one of the things that’s backstopping farmer sentiment.

Michael Langemeier: Definitely.

James Mintert: Uh, farmer sentiment in my view, would be lower than it is without this expectation of an MFP program coming along to bail out, uh, crop producers for weak prices.

[00:05:30] Farm Financial Performance & Investments

James Mintert: The Farm Financial Performance Index fell three points in September to a reading of 88. This month’s index is down 21 points compared to where it was in May. And May wasn’t actually the high point of the year, I think the high point was was, uh, January, but May was pretty close. But again, kind of highlighting this big difference in sentiment and perspective that’s taken place from May to September. We’ve really seen a decline.

Michael Langemeier: Yeah. Essentially the first six months of the year were, were, were higher, they were hovering right around that a hundred. In the last three months we’ve been, we’ve been at 90 or slightly below.

James Mintert: The Farm Capital Investment Index fell eight points this month. That’s after a rise last month, so it, it kind of undid the, the rise that took place a month ago. The September reading is the second lowest reading of 2025. January a reading of 48 was low with the lowest. If you look at it on a chart, the index just kind of bounces up and down from one month to the next. If you look at it compared to a year ago. That index is quite a bit stronger. 53 versus 35 a year ago. You go back two years ago, was it 39. Three years ago it was 31. So it, it surprises me that we’re seeing that strong of an index for capital investment relative to these last three years, given where we’re at with, for example, that Current Condition Index.

Michael Langemeier: Yeah, this is very surprising. I think it, it’s, it went up after the election and, and it’s really stayed up. It bounces around, but it, it stayed at a higher level, uh, like you said, than it was the previous two to three years.

And partly what’s also going on with this question, this question’s very difficult to, to, to, uh, to try to figure out whether this is driving the Index or Current Conditions, which is part of, or whether it’s driving the Index of Future Expectations. I think it’s driving both and we’ve got a colleague that that’s doing some research on, on, you know, looking at the, looking at the relationship between Farm Capital Investment Index and, and the aggregate indices.

And, and I think part of when they answer this question, they’re partly thinking short term. Is this a good time for crop producers to, to, to buy equipment? No. But they’re also thinking a little longer term. And so if you, if you’re somewhat optimistic about the policy environment five years out, you’re gonna be a little bit more optimistic with respect to this question.

James Mintert: Yeah.

Michael Langemeier: This is a complicated question.

James Mintert: It it is. And I guess, you know, one of the things that we’ve been trying to, uh, look results from this, from in, in terms of interpreting it was, you know, what’s this mean for things like. Farm machinery sales, and we’ve done some modeling in that respect and, and weren’t very successful, at least initially.

Um, it’s, it doesn’t seem to be providing a good indication as to what’s gonna happen with respect to tractor and combine sales in particular. Right.

Michael Langemeier: At least short term.

James Mintert: Yeah.

Um, if you look at the responses underneath that index, uh, which is the question, thinking about large farm investments like buildings and machinery, do you think now’s a good time or a bad time to buy ’em? Um, the index is, is really interesting that the, in, although the investment index fell this month, the percentage of producers who say it’s a bad time to invest is still well below a year ago. So that kind of speaks to what you were talking about, this complicated nature of the question.

Michael Langemeier: And then for a long time we were at about 10%. Good time was about 10% for a two, three year period. All the way from, from ’21 all the way right before the, uh, the ’24 election. And then it jumped up to that 15 to 25 range. And so, and, and, and that’s true for both the good time but also bad time. Bad time went down about 10 points and the good time went up about 10 points. And so there’s your 20 points.

James Mintert: Yeah. And it’s, it’s really interesting. If you look at, again, on a chart, going back to roughly September of ’21, it’s, it’s moving sideways, but at a pretty low level prior to that. Time we were operating at a little higher level with respect to the percentage of people saying good time. So there’s been kind of a shift since about ’21.

Michael Langemeier: Yeah.

[00:09:15] Farmland Value & Cash Rent Expectations

James Mintert: Uh, the Short -Term Farmland Value Expectation Index at 106 was six points lower than a month earlier, and it was 18 points lower than it was 2025 peak of 124 back in May. And again, you look at it on a chart and it looks like we’ve got a clear cut downtrend underway with respect to people losing confidence in the idea that farmland values are gonna continue to go up.

Michael Langemeier: When I received the raw data this month, this is one of the questions I really wanted to get a handle on because, because we all know how important farmland is to the, to the non-current part of the balance sheet. And, and it, it’s still positive, but it’s getting closer and closer to that index of a hundred.

James Mintert: Are you gonna stick your neck out and say what it’s gonna be at the end of the year?

Michael Langemeier: I think it’ll, I think it’ll stay above 100, but it’s gonna, it’s, it’s not gonna increase. I just can’t paint a picture where it increases it. It depends a little bit on the timing of the MFP payments.

James Mintert: Good point.

Michael Langemeier: Yeah.

James Mintert: Good point. I, if you look at the trend, it’s drifting lower.

Michael Langemeier: Yeah.

James Mintert: So if you had to guess what’s gonna happen next month, maybe lose another couple of points.

Michael Langemeier: Yeah.

James Mintert: So, um, and you know, if you look at the real responses to the question as you were just talking about. Um, this month’s change in the index was really attributable to a shift among producers choosing about the same from the higher category.

So in other words, it wasn’t because more people said farmland values are going down, it was because people, an increasing percentage of people said they think farmland values is gonna hold steady. Which I think is,

Michael Langemeier: Which I think is very consistent with the Federal Reserve Bank surveys and other surveys that have taken place this year.

James Mintert: Yeah, good point.

[00:10:50] Ag Exports & Trade Expectations

James Mintert: We’ve been asking this question going back to 2019, which is over the next five years, do you think ag exports are more likely to increase, decrease, remain about the same? And if you look at this month’s responses, you know that this has bounced around some here in, in 2025. we’ve had some months when we really saw a large percentage who thought, exports were gonna decrease. These last couple of months, it’s been much smaller. But we did see a shift here. Producers were less optimistic this month about ag exports than they were in August. The percentage expecting exports to grow fell. The percentage expecting exports to decrease rose. So there’s a little less confidence in what’s going on in the trade arena.

Michael Langemeier: I’m, I’m still surprised that 47%, uh, said that they expect exports to increase given that the environment we’re in. And so I’m a little surprised at that.

James Mintert: Well, and the related question is, do you expect the increased use of tariffs by the U.S. to strengthen or weaken the U.S. ag economy in the long run? And I think we’re starting to pick up what you’re talking about, Michael, fewer people expected to strengthen the ag economy than what we picked up when we asked this question last spring. Last spring, in April and May, 70% of the respondents said they thought tariffs were gonna strengthen the ag economy in the long run. Last, uh, in June it went down to 63%. This month it’s down to 51%. So it’s still a majority, but it is markedly different than what we were picking up back in April and May.

Michael Langemeier: And we were talking about that the Index of Future Expectations was higher earlier than this year. I think this chart here points to that very clearly. I mean, in April and May, 70% thought the path we were on was gonna strengthen the U.S. agriculture economy. That’s down to 51%.

James Mintert: Yeah. People are losing confidence.

Michael Langemeier: They’re losing confidence long term.

James Mintert: Yeah.

[00:12:33] Farmers’ Biggest Concerns

James Mintert: This is kind of an interesting question we’ve been asking for quite some time, and usually the results don’t change much from one month to the next, but we got a little bit of a change here these last two months. Looking ahead to next year, what are your biggest concerns for your farming operation? So, no surprise, high input cause remains the top concern followed by the risk of low output prices for crops and livestocks. And I think it’s largely being centered on, on crops. But the interesting thing that showed up these last two months, and I didn’t really pick up on this last month, but it showed up again this month, and that is this availability of inputs.

At one point, availability of inputs had dropped all the way to, I think maybe 5% of the people choosing that as the top concern. In August, it was 10%. This month is 14%. And that caught my eye. That’s still not a huge percentage compared to some of the other things we have on responses for this question. But 14% saying availability of inputs. That’s interesting.

Michael Langemeier: That was a surprise. And, and, and that put it in third place. And so that, that’s, uh, it, it, it increased enough to put it in third place.

James Mintert: My guess is that it’s related to what’s going on with tariffs and people are concerned about availability of things that we import, for example, whether the tariffs could, uh, raise the prices and make things hard to get in that sense from a, from a, maybe people choose to quit importing it. Um. So I, I think it’s related to this whole trade question and the use of tariffs and import restrictions.

Michael Langemeier: And people remember the logistical problems we had back in COVID. Maybe they’re thinking back, well, maybe this is gonna cause similar disruptions. And

James Mintert: Yeah, it’s, it’s really interesting because it, you know, I, well I, these last two months, when we got 10% a month ago, I just viewed that as kind of an anomaly. But when it came in at 14% this month, I said, wait a minute. There’s something going on here. So it’d be interesting to see what happens with that, uh, the next couple of months and see whether or not that continues to be as strong as it showed up this month.

So, and then, uh, the question we started asking back in July, and we’ve asked it three times in a row now. Uh, and again, this was one we copied from, from, uh, one of the consumer surveys. Would you say that things in the U.S. today are generally headed in the right direction or on the wrong track and the results have been very consistent. This month, 71% said right direction. Last month it was 69%. In July it was 74%. So despite producer’s concerns about current conditions, we’ve got a large majority of producers, the respondents saying things in the U.S. are heading the right direction. And it, my gut feel, Michael, is that this question captures more than what’s going on in agriculture.

Michael Langemeier: Yes.

James Mintert: Right. Uh, but it does tell me that producers are at least so far, still on board with the administration’s policies.

Michael Langemeier: Yeah.

James Mintert: With respect to what’s going on in agriculture.

Michael Langemeier: I, I, I, the way I would kind, kind of summarize is that they’re still confident that the, the policy environment the next five years is gonna be better than it was before the election. But I would, I would, uh, classify that as being a little weaker, uh, than, than it was a few months ago. And I, I’m, I’m, I’m, I’m basing that on that question we had about whether tariffs strengthen or weaken the economy.

James Mintert: Yeah. Yeah. When you ask. When you drill down, you get, it was clear there’s a little less confidence. When you ask this broader question, which encompasses more than just what’s going on in agriculture probably in in the respondent’s minds, you get a more positive response.

Michael Langemeier: But as long as you get responses like we’re seeing with this particular question, that Index of Future Expectations, it’s gonna stay higher than what it was before the election. If this starts coming down, then I think that Index of Future Expectations is heading down rapidly.

James Mintert: Yeah, good point.

[00:16:06] Conclusion & Resources

James Mintert: Well, that wraps up the highlights for this month’s survey. You can get the full report on the Purdue -CME Group Ag Economy Barometer website, which is purdue.edu/agbarometer. And of course, you can always subscribe to our podcast and listen to not only this topic, but a variety of farm management topics on the podcast, the Purdue Commercial AgCast.

So on behalf of the Center for Commercial Agriculture, I wanna thank my colleague, Dr. Michael Langemeier for joining me. And I’m James Mintert. Thank you.