US farmer confidence slips as crop margins fall

The Purdue University-CME Group Ag Economy Barometer fell 10 points to 125 in August, marking the third straight month of declines. The biggest drop was in the expectations index, which fell 16 points to 123, the lowest since September last year.

The current conditions index was little changed at 129, up 2 points from July. Sentiment varied sharply between crop and livestock producers, with crop farmers significantly less optimistic. Livestock farmers, on the other hand, are showing confidence amid record beef profitability, with livestock inventories at their lowest since 1951 pushing cattle prices to historic highs. At the same time, crop profitability is weaker in 2025.

Financial Expectations and Prices

Farmers generally maintain weak expectations for their farm profitability in the coming year. The Financial Performance Index was 91 in August (below 100), virtually unchanged from July. The USDA’s August reports forecast 2025/26 corn prices at $3.90 per bushel and soybeans at $10.10, well below breakeven estimates.

Despite the weak earnings outlook, the Capital Investment Index rose 8 points to 61, with livestock farmer optimism playing a key role.

Land Value and Rental Expectations

The short-term land value expectations index fell 3 points to 112, continuing a three-month downward trend. However, the index remained above 100, indicating prevailing expectations for higher values. Three-quarters of respondents also said they expect land rental rates to remain at 2025 levels in 2026, with only 12% expecting them to decline.

Growing Debt Burden

Operating loans were a particular focus in August. 22% of farmers said their debt will be higher in 2026 than in 2025, up from 18% in January. Of those, 23% cited the need to roll over outstanding debt from 2025 to 2026. That compares to 5% of respondents in January 2023 and 17% in January 2024.

According to Michael Langemeier, study leader and director of the Purdue University Center for Commercial Agriculture, the August results point to mounting financial pressures in the U.S. agricultural sector:

“Farmers expect their financial performance to decline in 2026, and the increase in farms rolling over debt into next season signals increased stress in the industry.”

Tags: corn, soybean, USA, margin