US farmers began 2025 with an optimistic outlook, as the January Purdue University/CME Group Ag Economy Barometer rose five points from December to a reading of 141, said Purdue agricultural economist Michael Langemeier, in a release of the monthly survey’s results.
This month’s survey was conducted between Jan. 13-17.
CURRENT CONDITIONS INDEX UP
The increase was driven by a nine-point growth in the Current Conditions Index and a three-point rise in the Future Expectations Index, Langemeier said. The improvement in sentiment was linked to higher crop prices between December and mid-January and fewer producers citing crop and livestock prices as a top concern.
For instance, Eastern Corn Belt prices for near-term delivery of corn and soybeans rose by 9% and 5%, respectively, during that period. While farmers’ views of current conditions improved, optimism about the future remained even stronger, with the Future Expectations Index exceeding the Current Conditions Index by 47 points.
FINANCIAL PERFORMANCE UP
The Farm Financial Performance Index climbed 13 points in January, reflecting a similar rise in the Current Conditions Index and indicating that producers, on average, anticipated 2025 will be a more robust financial year than 2024, he said.
Meanwhile, the Farm Capital Investment Index remained steady at a reading of 48, unchanged from December, Langemeier said. Despite no change, the investment index remained significantly higher than last summer’s low of 31 and represented the second-highest reading of the past three years.
Producers’ optimism about the future appeared to support the stronger investment index, though it was uncertain whether this optimism will lead to more farm machinery or new construction investments.
FARMERS OPTIMISTIC
“The January survey reflects a notable sense of optimism among US farmers, particularly regarding their expected financial performance in 2025,” the release said. Improvements in crop and livestock prices provided a boost to farmers’ current sentiment.
Although farmers were optimistic about the future, there were some clouds on the horizon, Langemeier said. For example, more farmers this month reported challenges in paying off operating loans compared with the last couple of years, and many producers were worried about the future of agricultural trade, with 40% saying they thought a trade war was either likely or very likely.
The Short-Term Farmland Value Expectations Index rose five points in January to a reading of 115, returning to its November level, he said. Farmer confidence in rising farmland values, which dipped late last summer amid weaker crop prices, has stabilized since October, with the index fluctuating between 110 and 120.
January’s modest improvement reflects a higher percentage of producers expecting land values to increase, coupled with fewer expecting values to remain unchanged, he said.
CATTLE, BEEF RECAP
The USDA reported formula and contract base prices for live FOB steers and heifers this week ranged from $205.31 per cwt to $209.04, compared with last week’s range of $201.74 to $211.62 per cwt. FOB dressed steers, and heifers went for $320.86 per cwt to $328.61, compared with $316.06 to $327.24.
The USDA choice cutout Tuesday was down $1.26 per cwt at $330.73 while select was down $2.43 at $317.41. The choice/select spread widened to $13.32 from $12.15 with 86 loads of fabricated product and 19 loads of trimmings and grinds sold into the spot market.
The USDA-listed weighted average wholesale price for fresh 90% lean beef was $375.62 per cwt, and 50% beef was $118.65.
The USDA said basis bids for corn from feeders in the Southern Plains were unchanged at $1.21 to $1.31 a bushel over the Mar corn contract, which settled at $4.94 1/2, up $0.05 3/4.
The CME Feeder Cattle Index for the seven days ended Monday was $279.45 per cwt, down $1.18. This compares with Tuesday’s Mar contract settlement of $268.25, down $2.25.