The Purdue University/CME Group Ag Economy Barometer dropped in May. Michael Langemeier, director of Purdue University’s Center for Commercial Agriculture, talked about the decline.
“The Purdue University/CME Group Ag Economy Barometer declined from 121 in April to 119 in May, driven primarily by worsening views of current conditions on the farm. High input costs were once again the dominant concern in this month’s survey. In fact, more than half of producers identified input costs as their biggest concern overall, while nearly half said those costs are the primary factor limiting improvement in their farm’s financial performance.”
Farmers appeared to be deeply concerned about current conditions.
“The decline in May was largely tied to weaker perceptions of current conditions. The Current Conditions Index fell by eight points and now sits at its lowest level since December 2024. Meanwhile, producers’ expectations for the future improved only slightly, by one point, and remain well below the level seen a year ago. Only 14 percent of producers said their operation is financially better off today than it was a year ago, and looking ahead to the next 12 months, just 22 percent of respondents expect their operation to improve financially.”
Langemeier said caution is also showing up in investment behavior.
“The Farm Capital Investment Index declined to 41 in May, its lowest level since September 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.”
About two-thirds of producers in the survey say they expect war in Iran to impact their bottom lines this year.
Breakeven prices are expected to climb in 2026.
“Among producers who planted corn in 2025, expectations for higher break-even prices remained widespread. About half of respondents expect corn break-even prices to increase up to six percent. 17 percent expect increases between six and nine percent, while nearly one-third expect break-even prices to rise by ten percent or more.”