Farmer expectations for the future of the agricultural economy unexpectedly surged ahead of the election in what is a significant rebound in optimism about the direction of the country, according to a survey from Purdue University and CME Group.
Producer sentiment in October increased 27 points over the previous month in Purdue and CME's Ag Economy Barometer index, marking the highest October reading since 2021 when profits were at their peak in the wake of the pandemic. The results were collected from Oct. 14 to Oct. 18 through a phone survey of 400 agricultural producers across the country.
"It’s clear that there’s more optimism about the future," Purdue agricultural economist James Mintert said of the results during a podcast discussion. "[Farmers] kind of view the downturn that we’ve seen here in 2024 as being transitory, and actually think maybe we’re going to have to see kind of a rebound of sorts in 2025."
The results were surprising to agricultural economists, who expressed sharply different views about the direction of the farm economy. Grain surpluses and declining crop prices are widely expected to strain farmer income in 2025, though the livestock sector is forecasted to see growth.
Michael Langemeier, another agricultural economist with Purdue, called the results "a bit of a head scratcher." He was surprised farmers not only expressed optimism about the future, but also about the current state of their financial conditions.
"Certainly we’re in an election cycle. That probably matters," Langemeier said on the podcast discussing the results. "People are a little more optimistic about 2025 than perhaps we are."
Outside of the election, a smooth fall harvest and slightly higher prices for corn and soybeans may have pushed farm sentiment higher, "but I don’t know if they’re big enough to explain what’s going on here," Langemeier added.
The percentage of farmers who said they would reduce their farm machinery investments next year decreased from 69% in September to 55% in October. The change was driven by more producers saying they will continue purchasing machinery at the same rate as last year, according to Mintert, who noted more producers in September said they expected to reduce their spending.
"The question is, are they going to really follow through on that?" Mintert said during the podcast discussion of the results.
In the most recent survey, policy and politics were among the main topics discussed by farmers in an open-ended question about the state of the economy. The November barometer, set to be conducted the week after the election, "is going to be very interesting," Mintert said.
