(The Center Square) – American farmers remain bullish on their futures, and fewer of them fear the prospects of a trade war. That’s according to survey results released Tuesday by the Purdue Center for Commercial Agriculture.
January’s Purdue University-CME Group Ag Economy Barometer Index moved to 141 in January, up 5 points from December’s survey. A year ago, the index was at 106, the lowest it had been for the first month of the year since 2016.
“U.S. producers expect 2025 to be better than 2024, as the Farm Financial Performance Index is at its highest level since late 2021,” the report stated.
While farmers remain highly optimistic about the future of their operations, they have also warmed up regarding the current state of their farms. The future expectation index was at 156 last month, up three points from December, and the current expectation index jumped 13 points to 111.
The report cited improving crop prices as a reason for the increase in current expectations.
James Mintert, the director of the Purdue Center for Commercial Agriculture, noted in a statement the current index has increased sharply since September, when it was at 68.
While the report said there is still “significant concern among U.S. farmers that a trade war could break out,” the percentage of respondents believing such an incident is likely or very likely is 40% (15% very likely and 25% likely). That’s actually down from December’s results of 48% (16% and 32%). The percentage of growers who believe rising tensions among trading partners is not likely went from 21% in December (4% very unlikely, 17% unlikely) to 29% last month (11% and 18%).
January’s barometer survey took place from Jan. 13-17, days before President Donald Trump’s inauguration. It was also well before the president announced tariff increases for China, Canada and Mexico, although the White House reported Monday that temporary deals were in place with Canada and Mexico to keep those 25% increases from taking effect for a month.
Foreign trade remains the primary issue for most farmers, with 42% saying it will be the most important policy for the farm over the next five years.
More farmers are expecting to take out a larger loan this year compared to last year, with 18% indicating that last month versus 15% in January 2024. The majority of farmers who anticipate borrowing more, 56%, say it will be because of increased costs.
Nearly a quarter of those farmers, 23%, told Purdue it’s because they need to carry over existing debt. Only 17% of farmers who received larger loans last year needed them for that reason.
