Uncertainty over ag trade policy leads to decrease in farmer sentiment
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Agricultural producers across the United States are expressing concerns over tariffs and agricultural trade, according to the latest Purdue University/CME Group Ag Economy Barometer.
The barometer is calculated monthly from a telephone survey of 400 agricultural producers across the country, and officials from the Purdue University Center for Commercial Agriculture say expectations for U.S. ag exports reached an all-time low in the survey’s history.
The barometer fell 12 points to a reading of 140 in March, which Michael Langemeier, the barometer’s principal investigator and director of the Center for Commercial Agriculture, said trade policy appears to be the most important thing on the minds of farmers.
But Langemeier said there is still some optimism for the future.
“While the overall sentiment shift in March reflects growing uncertainty, farmers remain cautiously optimistic about the future, particularly with farmland values holding steady and the outlook for strong returns in the livestock sector helping to offset weaker expectations among crop producers,” he said.
The latest survey was conducted between March 10-14, before President Donald Trump announced sweeping tariffs on nearly all U.S. trading partners.
However, the trade situation in the U.S. is becoming a growing concern among producers, Purdue said. Nearly half of respondents in March said trade policy is the most critical issue impacting their farms, up from an average of just 21% prior to the November 2024 election.
The survey found 30% of respondents expect ag exports will decline in 2025, nearly double the percentage from January.
“We think this is kind of interesting because historically export growth has been an engine of growth for the U.S. ag economy,” said James Mintert, former director of the Center for Commercial Agriculture. “So this loss of optimism about exports and the fact that it seems to be correlated now with the concerns about tariffs is is really indicative of a change in attitude.”
The survey asked farmers what impact they expect tariffs on imports would have on their farm’s income in 2025.
“Forty-three percent said ‘negative’ impact. If you add the ‘very negatives’ to the ‘negatives,’ you’re at 57%. So clearly a majority are worried about this,” said Mintert.
Farmers were also asked about the likelihood of a program similar to the Market Facilitation Program in 2019, which was created by the U.S. Department of Agriculture to compensate farmers for lower income due to a trade war.
About two-thirds of respondents said the implementation of such a program is either “likely” or “very likely,” which Langemeier said explains why the overall drop in farmer sentiment wasn’t as bad as expected.
“I think this is one of the reasons why the Index of Current Conditions and Index of Future Expectations didn’t drop as much as we thought it might,” he said. In the back of people’s minds, this was, ‘Well, if we do have lower net income because of trade, we’re likely to get these payments.'”
You can connect to the full survey results by clicking here.