CME Group farm sentiment index slips as input cost pressure weighs on U.S. producers

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CME Group farm sentiment slips

Highlights

The May Purdue University/CME Group Ag Economy Barometer shows 51% of respondents cite high input costs as their top concern, the highest on record, with 46% saying costs limit financial improvements.
The Farm Capital Investment Index drops by 3 points to 41, its lowest since September 2024, reflecting reduced appetite for major investments amid persistent input cost pressures and tighter margins.
Short-term farmland value expectations rise to 130 from 121, while only 31% of respondents expect good times for crop producers versus 68% for livestock producers over the next five years.

May survey highlights cost and income strain

As reported by CME Group, the May reading of the Purdue University/CME Group Ag Economy Barometer shows 51% of respondents identify high input costs as their top concern, the highest share recorded in the survey. Another 46% say those costs are limiting improvements in their financial position this year, underscoring the pressure on farm profitability across the U.S.

The survey, conducted May 11-15 among 400 farmers nationwide, also shows a cautious financial outlook. Only 14% of respondents say their operations are better off financially than a year ago, while 22% expect conditions to improve over the next 12 months.

The Farm Capital Investment Index declines by 3 points to 41, its lowest level since September 2024, indicating weaker appetite for large purchases. Michael Langemeier, principal investigator for the barometer and director of Purdue's Center for Commercial Agriculture, says persistent input cost inflation is especially difficult for producers already operating with tighter margins.

Questions on 2026 income expectations add to that caution. About two-thirds of respondents expect their farm's net income to be reduced in 2026, and among farmers who planted corn in 2025, nearly half expect corn break-even prices to rise by as much as 6%, while 30% expect increases of 10% or more.

Land values stay firm while labor and sector outlooks diverge

Despite softer sentiment on current conditions, farmland value expectations strengthen in May. The short-term farmland value expectations index rises to 130 from 121 in April, and the long-term index increases to 160 from 155, with producers citing alternative investments, interest rates and net farm income as the main influences on land values.

Labor availability remains a constraint for farms that employ workers outside the family. Roughly 39% of respondents hire nonfamily labor, and 44% of that group say they face some or a lot of hiring difficulty this year.

Farmers remain cautious about the immediate usefulness of artificial intelligence for labor and equipment needs. About 59% say AI would not improve their current situation, while 37% think it would help a little and 4% say it would help a lot.

The survey also points to a weaker national mood and a split outlook between agricultural segments. Since July 2025, the share of respondents who say the U.S. is heading in the right direction has declined to 52% in May from an average of 71% in the second half of 2025, while 31% expect good financial times for crop producers over the next five years compared with 68% for livestock producers.

Our earlier report on Southern U.S. rice producers pushing to expand sales to Cuba explained how growers are looking for nearby export demand as subsidized Asian competition and higher input costs squeeze margins. The piece also noted that long-grain rice plantings and exports are projected to decline, while Cuba’s financing constraints and hard-currency shortages could limit how quickly purchases can scale.

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