U.S. farmers began 2025 with an optimistic outlook, as the January Purdue University/CME Group Ag Economy Barometer rose 5 points from the previous month to a reading of 141. This increase was driven by a 9-point growth in the Current Conditions Index and a 3-point rise in the Future Expectations Index. 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. This month's survey was conducted between Jan. 13-17.

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, anticipate 2025 will be a more robust financial year than 2024. Meanwhile, the Farm Capital Investment Index remained steady at a reading of 48, unchanged from December. Despite no change, the investment index remains significantly higher than last summer's low of 31 and represents the second-highest reading of the past three years. Producers' optimism about the future appears to support the stronger investment index, though it remains uncertain whether this optimism will lead to more farm machinery or new construction investments.

"The January survey reflects a notable sense of optimism among U.S. farmers, particularly regarding their expected financial performance in 2025," said Michael Langemeier, the barometer's principal investigator and director of Purdue University's Center for Commercial Agriculture. "Recent improvements in crop and livestock prices have provided a boost to farmers' current sentiment. Although farmers are optimistic about the future, there are some clouds on the horizon. For example, more farmers this month reported challenges in paying off operating loans compared to the last couple of years, and many producers are worried about the future of agricultural trade, with 40% of this month's respondents saying they think a trade war is either likely or very likely."

The Short-Term Farmland Value Expectations Index rose 5 points in January to a reading of 115, returning to its November level. Farmers' 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 in recent months. January's modest improvement reflects a higher percentage of producers expecting values to increase, coupled with fewer expecting values to remain unchanged. Meanwhile, the Long-Term Farmland Value Expectations Index, which gauges expectations for the next five years, declined 5 points to 150. Despite the dip, the long-term index remains 8 points above its 12-month low recorded last August.

The January barometer survey, which has annually included questions about farmers' operating loans for the upcoming year since 2020, revealed a slight increase in the percentage of producers anticipating larger loans this year — 18%, up from 15% in 2024. Among those expecting an increase, 23% attributed it to carrying over unpaid operating debt from the previous year, compared to 17% last year and just 5% two years ago. The shift reflects a decline in farm income, particularly crop income, over the past two years and could be an early signal of rising financial stress among producers.

Agricultural trade remains a top concern for U.S. farmers. In January, 42% of producers identified "trade policy" as the most important policy for their farm over the next five years, more than double the 17% who selected "crop insurance program." While there is still significant concern among U.S. farmers that a trade war could break out that negatively impacts U.S. ag exports, responses regarding worries about a potential trade war have eased slightly since December, with 40% of producers now believing a trade war is "likely" or "very likely," down from 48% the previous month. Meanwhile, the percentage of farmers who see a trade war as "unlikely" or "very unlikely" rose from 21% in December to 29% in January.

Interest in leasing farmland for solar energy production continues to grow. In January's survey, 11% of farmers reported discussing solar leases for their land within the last six months. Lease rates offered by solar energy companies in 2024 and 2025 were notably higher than in previous years, with 40% of respondents reporting offers of $1,250 per acre or more and 26% receiving offers of $1,500 per acre or more. Additionally, 54% of respondents noted that contracts included escalator clauses, most commonly ranging from 2% to 3% annually, though some reported escalators of 3% to 4% per year. Overall, 3% of survey respondents said either they or one of their landowners had signed a solar lease.