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TUESDAY, SEPTEMBER 1, 2026 | SPECIAL REPORT & ANALYSIS
MARKET PERSPECTIVE | FARMER SENTIMENT
Farmer Sentiment Rises, but Optimism Is Still More About Tomorrow Than Today
Purdue barometer climbs to 135 as future expectations outpace current conditions
Analysis · September 1, 2026
U.S. farmer sentiment strengthened for a second consecutive month in August, but the latest Purdue University-CME Group Ag Economy Barometer suggests the improvement is being driven much more by expectations for better conditions ahead than by a meaningful change in the farm economy today. Link to report.
The overall Ag Economy Barometer rose nine points from 126 in July to 135 in August. The Index of Future Expectations jumped 11 points, while the Index of Current Conditions increased just one point. For the first time since June 2025, more producers said they expected their farm to be financially better off a year from now — 28% — than worse off, at 24%.
Figure 1. Ag Economy Barometer, August reading each year, 2016–2026. Source: Purdue University/CME Group Ag Economy Barometer, August 2026 report.
That divergence is perhaps the most important message in the August report. Farmers are not signaling that present-day margins have suddenly become comfortable. Instead, they appear increasingly willing to believe that conditions could improve over the next year.
The contrast is visible in the report’s current-versus-future chart, where the Future Expectations Index reached 140 compared with 123 for Current Conditions.
Figure 2. Ag Economy Barometer and its two subindices, July vs. August 2026. Source: Purdue University/CME Group Ag Economy Barometer, August 2026 report.
Financial Outlook Improves, but Producers Remain Cautious on Spending
Another encouraging sign came from Purdue’s Farm Financial Performance Index, which climbed from 90 at the beginning of 2026 to 103 in August, indicating producers have become more optimistic about their financial prospects over the next 12 months.
But farmers are not yet translating that optimism into aggressive capital spending. The Farm Capital Investment Index fell five points to 45, underscoring continued reluctance to commit money to machinery, buildings and other major investments.
Figure 3. Farm Financial Performance Index and Farm Capital Investment Index, 2026. Source: Purdue University/CME Group Ag Economy Barometer, August 2026 report.
That combination — improving expectations but weaker investment intentions — suggests producers remain highly selective with cash. A farm can expect margins to improve without concluding that today’s financing costs, equipment prices or operating expenses make expansion attractive.
Input costs remain the biggest obstacle. Forty-five percent of respondents identified higher input costs as their top concern, despite improving sentiment overall. Purdue also said low crop and livestock prices and rising interest rates remained important concerns.
Export Optimism Provides Another Lift
Farmers also became noticeably more confident about longer-term export opportunities. Purdue’s measure of expectations for agricultural exports during the next five years increased to 140, its highest level since December. That matters because improved export expectations can influence producers’ broader assessment of commodity demand even before those expectations translate into stronger cash prices.
The survey therefore paints a farm sector increasingly willing to look beyond today’s margin pressure. But confidence remains conditional: stronger demand and better financial prospects are anticipated rather than fully realized.
Farmland Confidence Strengthens
Farmland remains one of the strongest areas of farmer confidence. The Short-Term Farmland Value Expectations Index rose eight points to 127 in August.
Meanwhile, 65% of producers characterized farmland as a good investment, compared with 17% who considered it a medium investment and 18% who viewed it as poor. Respondents identified alternative investments, interest rates and inflation as the three factors exerting the greatest influence on farmland values.
Figure 4. How producers rate farmland as an investment, August 2026. Source: Purdue University/CME Group Ag Economy Barometer, August 2026 report.
The results reinforce a familiar distinction in agriculture: producers can be cautious about purchasing depreciating capital assets such as machinery while remaining relatively confident in farmland as a long-term store of wealth.
Farmers See Strategic Planning as Both a Weakness and an AI Opportunity
One of the more revealing portions of the August survey dealt with management skills. When farmers were asked which skill currently generates the greatest return on investment, production skills ranked first at 29%, followed by financial management and analysis at 23% and strategic planning at 22%.
But when asked where their operations most need improvement, strategic planning ranked first at 28%, ahead of selling products at 20%, buying inputs at 19%, financial management at 17% and production at 16%.
Strategic planning also ranked first when farmers were asked where artificial intelligence could provide the greatest improvement, selected by 32% of respondents. Financial management and analysis followed at 28%, with production at 18%.
Figure 5. Skills that farmers say generate the most return today, most need improvement, and offer artificial intelligence the greatest opening, August 2026. Source: Purdue University/CME Group Ag Economy Barometer, August 2026 report.
That finding may have significant longer-term implications. Farmers apparently see AI less as simply another production technology and more as a potential management tool — helping with planning, financial analysis and decision-making in an increasingly complicated operating environment.
Bottom Line
The August barometer is clearly more positive, but it is not yet a declaration that farm-sector financial stress has passed. Farmers are more optimistic about next year’s finances, future exports and farmland values, while remaining reluctant to increase capital investment. High input costs continue to dominate producer concerns, and confidence in current conditions has improved only marginally.
The result is a cautiously improving mood: farmers increasingly see a path toward better conditions, but they are not yet behaving as though those better conditions have arrived. That distinction will be important in coming months.
A sustained improvement in commodity prices, input costs or financing conditions could turn higher expectations into actual spending and investment. Until then, the August Purdue barometer looks more like an improvement in confidence than a broad recovery in the farm economy.
AG POLICY & MARKETS DAILY | MARKET PERSPECTIVE | FARMER SENTIMENT — TUESDAY, SEPTEMBER 01, 2026
