Farmer sentiment improved in July, reversing three consecutive months of declines as stronger corn and soybean prices helped boost producers’ outlook on the agricultural economy.
The latest Purdue University-CME Group Ag Economy Barometer climbed to 126 in July, up 13 points from 113 in June. The monthly survey measures agricultural producers’ perceptions of current economic conditions and their expectations for the future.
The July improvement was driven by gains in both producers’ assessment of current conditions and their expectations for the months ahead. Stronger corn and soybean prices during the survey period contributed to the more optimistic outlook.
Despite the rebound in sentiment, farmers continue to face significant financial pressures, particularly from elevated production expenses.
Nearly half of producers surveyed identified high input costs as their biggest concern. Another 30% pointed to crop and livestock prices as the greatest long-term risk facing their operations.
Farm financial conditions also remain challenging. Just 13% of producers surveyed said their farms are financially better off than they were a year ago.
However, the July survey showed growing optimism about the year ahead. More producers said they expect financial conditions to improve during the next 12 months, suggesting expectations are beginning to recover even as current margins remain under pressure.
Farmers also showed more willingness to consider major purchases. The Farm Capital Investment Index rose to its highest level since March, indicating an improvement in producers’ views about whether now is a good time to make large investments in machinery, buildings and other farm assets.
The Ag Economy Barometer is produced by Purdue University’s Center for Commercial Agriculture and CME Group and is based on a monthly survey of U.S. agricultural producers.