Farmer sentiment dropped again in May, with the Purdue University-CME Group Ag Economy Barometer Index dropping 2 points to 119. 

This month’s Current Conditions Index was 21 points below last year’s December index, reaching its lowest level since December 2024. 

High Input Costs Keep Farmer Sentiment Down Chart.jpg

The percentage of respondents who listed high input costs as their biggest concern was 51% in May, reaching a new high. In a related question, 46% of respondents indicated that high input costs are limiting improvements in their financial position this year. 

The percentage of respondents who think the U.S. is headed in the “right direction” declined from 57% in April to 52% in May, the lowest percentage since we started asking this question in July 2025. 

Michael Langemeier says caution is also showing up in investment behavior. 

“The Farm Capital Investment Index declined to 41 in May its lowest level since September of 2024. This index measures producers' willingness to make large investments such as machinery, equipment, or buildings. A continued decline in this index signals increasing hesitation towards major capital purchases likely reflecting tighter margins, elevated borrowing costs, and ongoing uncertainty surrounding profitability.”

“Questions related to the IRAN conflict were included again in this month's survey, particularly regarding its impact on input costs and profitability. Approximately two thirds of producers expect the conflict to negatively impact their farm's income in 2026. And remember, we have both crop and livestock producers in the survey. Among producers who planted corn in 2025, expectations for higher breakeven prices remained widespread. About half of respondents expect corn break even prices to increase up to 6%. 17% expect increases between six and 9% while nearly one third expect breakeven prices to rise by 10% or more.”

Respondents were also asked whether artificial intelligence (AI) tools would improve their current labor and equipment situation. Approximately 59% indicated that it would not improve their situation, while 37% indicated that it would help some, and 4% indicated that it would help a lot.

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