High crop yields and a rapid fall harvest helped boost farmer confidence to its highest level since last November, just a month after it fell to its lowest reading in six years, said a Purdue University poll on Tuesday. “Farmers’ optimism about the future shifted in October, leading to an expectation of better financial performance in 2025 than in 2024,” said the monthly Ag Economy Barometer.
Nearly as many farmers said their operations would be better off financially as said they would be worse off a year from now, 19 percent vs. 23 percent. In the preceding survey, 18 percent expected improvement and 38 percent said financial conditions would worsen. Lower commodity prices and high costs are producers’ top concerns for the future but fewer worry about interest rates.
The barometer reading of 115 points was 27 points higher than its month-earlier reading of 88, the lowest since March 2016.
“Producers expressed some optimism that economic conditions will improve and not precipitate an extended downturn in the farm economy,” wrote agricultural economists James Mintert and Michael Langemeier, who oversee the barometer. They said high crop yields and a stress-free harvests in the Midwest and Plains states likely were factors that brightened farmers’ views of their financial condition.
Farmers split 33-33 on whether the farm sector would see good times or bad times over the next five years. In the preceding survey, 48 percent expected bad times and 26 foresaw good times. Respondents were far more likely to forecast good times if they were livestock producers than crop growers, 51 percent vs. 32 percent. Livestock revenue was stronger than initially forecast this year during an overall decline in farm profitability from 2022, when net farm income set a record high.
It was the first Ag Barometer report since the Federal Reserve lowered interest rates by one-half of a percentage point on Sept. 18. The slowing U.S. inflation rate justified the reduction, said the Fed. It will review interest rates again this week.
For the Ag Barometer, Purdue interviews operators with production worth at least $500,000 a year. According to USDA data, 7.4 percent of U.S. farms have annual sales of $500,000 or more. The survey has a margin of error of plus or minus 5 percent. The latest survey was conducted from Oct 14-18.
The Ag Economy Barometer was available here.