WEST LAFAYETTE, IND. — Declining farm income expectations pushed the Purdue University/CME Ag Economy Barometer in September to its lowest level since March 2016 that reflected an economic downturn, falling 12 points to 88.

This month’s survey, conducted Sept. 9-13, revealed that farmers increasingly are worried about commodity prices, input costs, agricultural trade prospects and the potential impact of the upcoming US elections on their farm operations. 

The Index of Future Expectations dropped 14 points to 94, and the Index of Current Conditions also fell 7 points to 76, which nearly matched levels seen in April 2020, during the height of COVID-19 concerns for farmers.

Source: Purdue University/CME Group

“The continued drop in the barometer reflects deepening concerns among farmers regarding expectations for farm income in 2024 and 2025,” said James Mintert, the barometer’s principal investigator and director of Purdue University’s Center for Commercial Agriculture. “It’s notable that producer sentiment dropped back to levels last seen in 2016 when the US farm economy was in the early stages of an economic downturn.

“In addition to commodity prices and input costs weighing heavily on their operations, producers are also facing considerable uncertainty about what lies ahead for their farms with the possible government policy changes following the upcoming 2024 elections.”

When asked to identify their top concerns for the coming year, low commodity prices and high input costs were nearly tied, with 34% of farmers citing input prices and 33% pointing to lower output prices as their primary concerns. Interest rates trailed behind as a top concern at 17%. A year ago, input costs were the top concern at 33%, followed by interest rates (25%) and low commodity prices (22%). 

Producer apprehensions about commodity prices matched up with a lack of confidence in the future of US agricultural exports as only 26% of respondents expect ag exports to rise over the next five years. That is the most pessimistic response to this question since it was first introduced in 2019. Additionally, 78% of producers expressed concern that federal government policy changes following the fall 2024 elections could impact their farms.

The Farm Financial Performance Index fell for the third consecutive month, dropping to 68 in September from 72 in August. Farmers’ financial expectations have declined markedly compared to a year ago, as the index was at 86 in September 2023. While the Farm Capital Investment Index increased by 4 points from August to a reading of 35, it sits just above its all-time low, indicating that many producers believe it is not an opportune time for making large investments.

The Short-Term Farmland Value Expectations Index dropped by 10 points to 95. This is the first time since 2020 that the index fell below 100, indicating that more farmers are expecting a decline in farmland values over the next year than those who anticipate an increase.