Farmer sentiment declined in December as the Purdue University/CME Group Ag Economy Barometer dropped 9 points to 136. The Index of Current Conditions fell 13 points to 100, while the Index of Future Expectations decreased 8 points to 153. Both indices remain well above September lows.

Optimism about long-term conditions persists, with 57% of producers anticipating positive outcomes for U.S. agriculture over the next five years. This is up from 34% in October. The optimism is driven by expectations for favorable policy changes post-election, especially regarding environmental, estate and income tax regulations.

The near-term sentiment is less favorable. Fifty-seven percent of farmers reported worse financial conditions compared to last year, while 51% expressed concerns about the agricultural economy over the next 12 months.

Investment sentiment weakened. The Farm Capital Investment Index dropped 7 points to 48. Short- and long-term farmland value expectations also dipped slightly.

Trade policy remains a concern, with 48% of farmers anticipating a potential trade war impacting agricultural exports. Despite challenges, optimism about long-term prospects continues to shape farmers’ outlooks.

Read more from the Purdue University/CME Group Ag Economy Barometer here.