Better Outlook for the Future Pushes Farmer Sentiment Higher

---

Audio Transcript

James Mintert: Welcome to the Purdue Commercial AgCast, the Purdue University Center for Commercial Agriculture’s podcast featuring farm management news and information. I’m your host, 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 a professor of agricultural economics here at Purdue.

We’re going to review the results from the November 2025, Purdue University-CME Group Ag Economy Barometer survey of farmers from across the nation. Each month we survey 400 farmers across the US to learn more about their perspectives on the ag economy. This month’s Ag Barometer survey was conducted from the 10th through the 14th of November.

[00:00:46] Overview of Ag Barometer Results
—

James Mintert: And Michael, the Ag Economy Barometer Index jumped up 10 points this month to reading of 139. That leaves the index 19 points lower than it was in May, which was the index’s high point for 2025. Were you surprised at the jump?

Michael Langemeier: No, I wasn’t surprised at the jump. You never know how big the jump’s going to be, but the October survey, it was mid month October, and it was before the trade agreement information related to China. And so this survey took that into account and, and I think that was why the barometer jumped.

James Mintert: You know, if you look at it, it was really all driven by an improvement in the Index of Future Expectations. People became more optimistic about the future. Current Condition Index actually fell a couple of points this month, whereas the Future Expectation Index was up 15 points compared to where it was in October. And so that transition really, I think, accompanies what was taking place with respect to trade prospects, and we’ll talk more about that a little later, but clearly people became more optimistic about trade in the month of November relative to where they were in October.

And in fact, you know, one of the things we looked at was the percentage of people who say it’s gonna be good times in the next five years versus the percentage of people say it’s gonna be bad times, and you can see an improvement there. Right? There were fewer people saying they expect to see bad times, and a small increase in the percentage saying good times. So really it was about losing some of the negativity. Is that right?

Michael Langemeier: And particularly for the crop producers in the survey.

James Mintert: Yeah. If you look at crops versus livestock and keep in mind what happened in between that October survey and the mid-November survey that we did. Cattle prices dropped pretty sharply. They were still at profitable levels, but a pretty sharp decline. And when you ask livestock outlook for the next five years versus the crop outlook for the next five years. It was radically different, right? The livestock numbers dropped, I think all the way from 70, which was one of the highest readings we ever got in percentage of good times all the way back to 49%, so a 21 point drop, whereas the crop side basically moves sideways, right?

Michael Langemeier: Yes.

[00:02:45] Farm Financial Performance & Investments
—

James Mintert: So the Farm Financial Performance Index rose 14 points in November to reading of 92. That takes the index back near where it was in late summer. And this month’s index though, even though it was up, is still, I think, 17 points lower than it was in May. And of course May was when many of our indices actually kind of hit their peak for 2025. So. I dunno about you, Michael, I was a little bit surprised to see the jump in that index, at least to this magnitude.

Michael Langemeier: Yes, I was too. I mean, this index tends to be highly Correlated with Index of Current Conditions. That index was flat this month and this one increased quite a bit. And so that, that was a bit of a surprise. And I, I point to exports, you know, the positive news regarding to a trade agreement with China, I think was very positive for this index.

James Mintert: Yeah, normally I would’ve expected that to also be reflected in the Current Condition Index. And I think for some reason we kind of got this blending of current and future going on with this particular survey. And so people just became more optimistic about where their farm was at. I think in some respects, people are probably looking at the value of their inventories, right?

Michael Langemeier: Yes.

James Mintert: Corn to soybean prices rose significantly.

Michael Langemeier: Yeah.

James Mintert: All those crops that were already sitting in the bin, all of a sudden look more valuable than they did a month ago.

Michael Langemeier: Definitely.

James Mintert: So the Farm Capital Investment Index, I think fell six points to reading a 56. The percentage of respondents who chose good time fell to 16%. That’s down from 24% in October. While the percentage who chose bad time fell two points to a reading of 60. And I think a weaker livestock outlook probably had some impact here. I think without that, this Capital Investment Index might have gone up a little more.

Michael Langemeier: Yeah, you’re probably right, but really this index has been kind of seesawing back and forth since about February. It’s rained from about 55 to 65, and it seems like we’re up one month and we’re down the next month, and so I don’t know if these changes are necessarily significant.

James Mintert: That’s a good point.

So we previously asked back in September, if a trade war leads to lower prices for US ag products, how likely do you think it is that farmers will receive compensation similar to 2019’s Market Facilitation Program? The totals of the likely and very likely categories didn’t change a whole lot. I think back in September, 83% said it was either likely or very likely. This month it was 76% said likely or very likely. But what did change was we kind of flipped those categories. In September, I think it was 62% said very likely this month that was down to 16%. And in September, I think 21% said likely this month, I think that was 60%.

So people became less confident that an MFP payment was gonna be made, although overall, there’s still somewhat confident, right?

Michael Langemeier: This has to be tied again to the export news. I mean, people are thinking, well, the prices are a little bit better. Maybe it’s less likely that we will get this payment. And I think it reflects in this survey result.

James Mintert: Yeah. And I think that’s exactly right. And what’s interesting is how it changed overnight.

Michael Langemeier: Yes.

James Mintert: Right. Because I think it happened that week.

So the follow up question was, if USDA provides an MFP payment to compensate for weak commodity prices, what will be the principle use of the payment on your farm? And the results are pretty consistent across the two times we asked it. We asked it in October. We asked it again here in November. This month, 58% said they would use it to pay down debt. Back in October it was 52%. Only 11% this month said they’d use it to invest in farm machinery. I think in October it was 12%.

So pretty consistent. I mean, and even if you think about the working capital category, which was 21% this month, and I think 25% in October. Basically people said they’re gonna use to repair their balance sheet, right?

Michael Langemeier: Yes. And, and this makes a lot of sense from a repayment capacity standpoint. ‘Cause when you calculate repayment capacity, you tend to look at family living. Do I have enough money to cover family living? Do I have enough money to repay debt? And then after that looking whether you have enough money for machinery, and I think what this is reflecting is they wanna restore their balance sheet a little bit, but also there just isn’t enough cash flow left to spend a lot of money on new investment.

James Mintert: Yeah. And the related point on this survey is we wondered how this would play out when we posed the question and had really kind of talking about it. One of the categories was use the. Payment to cover family living expenses and the results are pretty consistent. In October is 11%, so they’d use it to cover family living or help cover family living. This month it was 10%.

My read on that is that those are the farms that are under significant amount of financial stress.

Michael Langemeier: I would agree. I mean that percentage is a little higher than you’d think if there wasn’t financial stress.

James Mintert: Yeah. Definitely right? Yeah. So that’s, we’ll ask this question again depending on how things play out.

Michael Langemeier: Yeah.

James Mintert: But I think this is maybe one indicator of the amount of stress that’s out there.

Follow up question we ask all the time is, what are your plans for farm machinerypurchases in the upcoming year compared to a year ago? And if you look at the responses, not so much a one month change, but over the course of the last roughly four months, there’s been a little bit of a trend. Fewer people are telling us that they’re gonna reduce their purchases. Compared to a year ago. More people are telling us that they’re gonna hold their purchases constant with a year ago. Not enough of a shift to turn around what’s going on with respect to farm machinery sales, tractor sales, combine sales, four wheel drive tractor sales. All down sharply. And I don’t think that’s changing, but maybe just a little more positive outlook.

Michael Langemeier: And then just to reiterate this didn’t change from last month and so you have some positive export news and you really don’t have much change at all. With respect to the plans for machinery purchases.

James Mintert: And that’s consistent with the prior one where they said

Michael Langemeier: Yes.

James Mintert: that they, you know, how would you use an MFP payment.

Michael Langemeier: Repaid debt.

James Mintert: Yeah.

[00:08:21] Farmland Value Expectations
—

James Mintert: The Short Term Farmland Value Index was up three points this month to reading of 116. It’s up about 10 points over the last two months, so its been kind of a nice rebound there in terms of optimism. That puts the index back about where it was this time last year. This time last year was at 115 and of course you go back three and four years ago the index was significantly higher.

So if you look out over just the, roughly the last year, kind of a sideways move, modest amount of optimism. Do you agree with that?

Michael Langemeier: Yeah, I think stable land values is what this is suggesting.

James Mintert: Yeah. And a two month rise again reflects a little more optimism than what we were picking up previously.

And if you look at the Long-term Farmland Value Expectation Index, that did surprise me. It’s set a new record. It’s at 165. That’s only up four points compared to last month. But if you look at it from a historical perspective we’ve only been close to this high a couple of times. We’ve been at 158 a couple of times previously, but these last two months have been very strong.

When the 161 showed up last month, which was about a 15 point rise compared to September. I wondered if it was just a one month aberration, but apparently not.

Michael Langemeier: Yeah. This one here’s a bit surprising, a bit head scratching, if you will, because you look at corn futures quite a ways out. And they’re not just for basis, they’re not $4.50. That doesn’t seem lead me to believe that the fundamentals are that strong, long term. They’re not weak necessarily, but they’re not that strong. But there’s a lot of optimism long term. And this is clearly shown in this Long-Term Farmland Value Index.

James Mintert: Do you think this is related to what’s going on in gold?

Michael Langemeier: Yes. That’s a very good point.

James Mintert: That, so your answer is yes, it is.

Michael Langemeier: It is related.

James Mintert: So you’ve done quite a bit of research on farmland values from the long-term perspective and portfolio allocation, et cetera. How does those work?

Michael Langemeier: When people have a lot of, there’s a lot of uncertainty, particularly with, there’s a lot of uncertainty about prices. Inflation. They tend to flock towards farmland, real estate and gold. And farmland is an excellent hedge against inflation just as good if not better than gold. And so that probably is providing some strength there. Very good point.

James Mintert: We did a follow up here. We’ve asked this twice in the summer months and then didn’t do it for a couple of months, but what, what are your expectations for cash rent in your area in 2026 compared to 2025? So this went to crop producers. I think this month might have only gone to corn to soybean producers.

Michael Langemeier: Yes.

James Mintert: So really kind of a reflective of what’s going on in the corn belt perhaps. 74% said they think cash rents next year will be about the same as this year. That really hasn’t budged. Last summer it was 73% one month, 75% one month.

Michael Langemeier: And that’s what we were checking. Obviously, we wanted to know whether the recent news was going to maybe see some increases in cash rents. And that wasn’t the case. Most people are saying hold the ship about the same as last year.

James Mintert: And we’re probably at the stage where the bulk of those agreements have already been made.

Michael Langemeier: Yeah, they’ve already been made.

James Mintert: Yeah.

Michael Langemeier: So they’re not gonna make any changes.

James Mintert: Yeah.

[00:11:14] Ag Exports & Trade Expectations
—

James Mintert: Question we’ve been asking all the way back to 2019, over the next five years, do you think ag exports are more likely to increase, decrease, or remain about the same? I think you probably referenced this earlier. The percentage of people who say it’s gonna decrease dropped off pretty sharply. It went to 7%. Say that exports are likely to decline over the next five years. That’s cut in half from last month, 14%. And really it’s been almost five years since we’ve seen that lower percentage of people who think exports will decline.

Michael Langemeier: Yes. And so you know, this is a five year question, so they’re obviously expecting, that the trade agreement with China to be positive longer term.

James Mintert: Yeah. Very interesting. Just a little bit of a shift there. The percentage you think it’s gonna increase really didn’t budge this month. What we lost was some of the negativity.

Michael Langemeier: Yes.

James Mintert: Right. And I think you’re right. I think that’s reflective of the trade agreement.

And first time we asked this question, this went to corn farmers only. Over the next five years, do you think US soybean exports are more likely to increase, decrease, remain about the same? And almost half, 47% said increase. 45% remain about the same. But only 8% said decreased. And I think that’s really consistent with the prior question, right?

Michael Langemeier: Yes. It’s a little hard how they’re answering this question, using previous years as the base, I would argue they’re probably gonna be about the same. Joanna Colussi, one of our colleagues, has done some analysis related to this. If the 25 million metric tons that’s supposed to go to China in ’26, ’27 and ’28 actually materializes, that’s slightly under the five year average ending in ’24. And so that would say about the same. And so maybe we wanna word this question slightly different next time.

James Mintert: Yeah. Good. That’s a good question.

[00:12:59] Farmers’ Biggest Concerns
—

James Mintert: We’ve been asking this question for some time now. Looking ahead to your next year, what are your biggest concerns for your farming operation? And people continue to point to high input costs. That never changes. I think it’s been that way every single time we’ve asked a question.

And then so a follow up. Was what changes, if any, will your farm make in 2026 to respond to low corn prices? And this only went to people who said they planted corn in 2025. And about four outta 10, 39%, said they would not make any changes. Among those who said they would make some changes. The top two choices were adopt lower cost seed traits and reduce phosphorus application rates. A smaller percentage said they would reduce or look at reducing end rates, nitrogen rates, or reducing seeding rates.

What do you make of that?

Michael Langemeier: I’m not too surprised at the phosphorus and maybe changing seeding traits. Those are some things you can do. Probably without, not a lot of impact on yield, particularly the phosphorus. If you’ve got quite a bit of soil phosphorus in the soil, maybe you can skip a year or something like that. And seed varieties, you probably can make some changes there without impacting the yield very much. I was a little surprised at the N rate and the seeding rate, however. I thought those were closer to optimal and so no changes would probably be needed even if prices are relatively lower or for corn or fertilizer’s relatively higher or lower. I thought those wouldn’t change very much.

James Mintert: Yeah. You and I both did a number of workshops back in the 2014 to 2019 era when we had the last downturn, and trying to help people identify ways to reduce their cost per bushel and you know, reducing N rates is tricky. You really run the risk of cutting back on yield, and if you’re not careful, you might actually increase your cost per bushel of output.

Same story with respect to seeding rates, so. And my view of this is these are things that people are thinking about doing. They haven’t committed to doing these things. So, we’ll see how that plays out. We’ll probably ask this again over the course of the winter. It gets a little closer to planning time.

Couple of questions that we’ve been asking here recently. First one is, do you expect the increased use of terrorists by the US to strengthen or weaken the US ag economy in the long run? The results haven’t changed dramatically with respect to people saying a majority saying that they expect to see this will actually ultimately strengthen the ag economy. But we do have less confidence in that. We first asked this back in the spring, 70% of the people in the survey said it would strengthen the ag economy. I think that’s down to about 58% now. So we still have a majority, but it’s a smaller majority. Probably the bigger shift is the percentage of people who say that they’re uncertain how this is gonna play out in the spring, only 8% of the people in the survey said they were uncertain. The last three months that’s roughly doubled. And this month it was 17%. Last month it was 16%.

So there has been a shift. People are less confident, although we still have a majority think it’s gonna play out. Okay. What’s your take?

Michael Langemeier: I’m not too surprised that the uncertainty went up a little bit because, look how long it took to get that trade agreement with China. I mean, we were waiting on that quite a while. It didn’t happen till late in October. And so it makes people wonder, this is a little, maybe a little harder than we thought it was going to be. And so maybe there’s some uncertainty the long run, whether this is gonna be a positive or negative.

James Mintert: Yeah, less confidence. And it, really does show up. We’ve asked it now I think six different times so you can kind of see the difference over time.

And then the last question we start asking back in July, which is, would you say that things in the US today are generally headed in the right direction or the wrong track, and that’s. This is obviously a little more than just agriculture and, and farm commodities, et cetera. So those results have changed a little, but not very much. A majority of the people in the survey, I think this month it was two thirds of respondents say things are headed in the right direction. 33% this month said we’re on the wrong track.

That’s a small shift compared to where we were in recent months. I think in prior months we were up over 70% saying right direction, and a little less than 30%. I think last month it was 28% said wrong track. So. Consistent with the prior question. I think, you know, people are still on board with the policies that are being implemented. In this case it’s a little broader than just what’s going on in agriculture, but it’s very interesting.

Michael Langemeier: I, I’m just curious, I mean, you borrowed this question from you know, from non-ag, you know, the, the non-ag world. Don’t you think this would be answered differently? If this was all US citizens? I don’t think they’d be quite so positive. And so the point I wanna make is I think the, ag producers are probably more optimistic about us being on the right track than maybe everybody.

James Mintert: Yeah, that’s a good point. And I think that’s true. We should probably do a more direct comparison.

Michael Langemeier: Yeah.

James Mintert: I haven’t seen you’re right. One of the bigger consumer survey organizations was using this question and we, we basically adapt

Michael Langemeier: Consumer sentiment has been down a little bit and so. Yeah.

James Mintert: Yeah. Consumer sentiment’s actually quite weak.

Michael Langemeier: Yes.

James Mintert: So different perspective.

[00:17:41] Conclusion & Resources
—

James Mintert: That wraps up the highlights of this month’s survey. You can get the full report on our website which is purdue.edu/ag barometer. And on behalf of the Center for Commercial Agriculture and my colleague, Dr. Michael Langemeier, I’m James Mintert. Thanks for joining us.