U.S. farmer sentiment weakened again in May as rising production costs, financial pressure, and concerns about profitability continued weighing on producer outlooks, according to the latest Purdue University-CME Group Ag Economy Barometer on Tuesday.
The index slipped to 119 from 121 in April, marking a second straight month of softer sentiment and reflecting growing unease about current farm conditions.
The decline was driven primarily by worsening views of present conditions. The Current Conditions Index dropped eight points to its lowest level since December 2024, while expectations for the future improved only slightly. Just 14% of producers surveyed said their farms were financially better off than a year ago, while only 22% expect their operations to improve financially over the next 12 months.
Input costs remain the dominant concern across agriculture. More than half of respondents, 51%, identified high input costs as their biggest issue, the highest percentage recorded in the survey. Nearly half of producers also said elevated expenses are preventing improvements in their financial situation this year. When asked about the biggest barrier to stronger farm finances, 46% pointed to input costs, far ahead of weather risk at 19% and low commodity prices at 14%.
The pressure from rising costs appears to be affecting investment decisions as well. The Farm Capital Investment Index fell to 41, its lowest level since September 2024, suggesting farmers are becoming less willing to make large purchases or expand operations amid uncertain profitability.
Geopolitical concerns also remain a major factor shaping farm outlooks. Roughly two-thirds of farmers surveyed expect the conflict involving Iran to reduce net farm income in 2026, largely through higher input costs and market uncertainty. Among corn producers, nearly one-third expect corn breakeven prices to rise by at least 10%, while another 17% expect increases between 6% and 9%.
The survey also highlighted a widening divide between sectors. Livestock producers continue to show considerably more optimism than crop farmers, with 68% expecting favourable conditions ahead for livestock operations compared to only 31% for crop producers. While farmers remain somewhat optimistic about land values, confidence in broader economic and policy conditions continued to erode, with fewer producers believing the U.S. is headed in the “right direction.”
After averaging 71% over the last six months of 2025, the percentage of producers who reported that the U.S. is headed in the right direction fell from 57% in April to 52% in May, the lowest percentage since July 2025.
