Pdf The Outlook For The U S Economy In 2025 Ag Purdue Edu

Leo Migdal

-Dec 3, 2025, 12:39 PM

pdf the outlook for the u s economy in 2025 ag purdue edu

WEST LAFAYETTE, Ind. — 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... 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...

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 —...

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. Back in 2020, at the height of pandemic pandemonium, farmers needed answers. This led to the creation of AgAmerica’s economic report—an annual synopsis of the passing year and outlook for the year ahead. Since inception, these farm economy reports have been used to guide financial decisions for operators, educate university students, provide statistical insight for media, and more. This year, to provide operators with more comprehensive insight, we reached out to leading agricultural economists across the U.S.

and identified some universal realities facing farmers in 2025. Fill out the form below to access your free farmland report. Δdocument.getElementById( "ak_js_1" ).setAttribute( "value", ( new Date() ).getTime() ); Agriculture is cyclical and the consensus is we're in a downturn—but how steep and for how long is the question. Factors influencing the current state of the farm economy include: Over the past month, the US Department of Agriculture (USDA) has provided its outlook for agriculture in both the short and long term.

The last couple of years have been challenging in the agricultural economy. Prices for crops have fallen, costs have risen, and net farm incomes have retreated. Drought, tariffs, and inflation remain as substantial concerns for the industry. The projections for 2025 highlight some of those challenges for agriculture in the year ahead and indicate that the ag economic downturn will likely continue, as production is likely to exceed consumption for many... Let’s start with the one market where production is declining, cattle/beef. Table 1 outlines some of the basic numbers for cattle/beef.

For the cattle sector, producers have been reducing their herds for several years. The long-run drought throughout various portions of the United States over the past five years has forced a significant reshaping of the cattle industry. The lack of high-quality pasture forced cattle producers to send more heifers into feedlots and sped up the movement of cattle to slaughter plants. Over the years, that has significantly reduced the overall size of the national cattle herd. The smaller herd translates into fewer cattle and lower beef production. We started this year with 1.2 million less cattle than we had last year—that will translate into a 1.1-billion-pound drop in beef production, lowering production to 26 billion pounds.

With the combination of lower production and stubbornly strong domestic consumption, beef exports are projected to fall to 2.6 billion pounds, while beef imports have risen to 4.4 billion pounds and retail beef prices... As the herd continues to shrink, steer prices have risen significantly over the past few years. The outlook for 2025 shows average steer prices reaching $186 per hundredweight, with the potential for prices to rise to $200 per hundredweight. Unlike the national cattle herd, the national swine herd has been growing over the past couple of years as productivity gains have more than offset smaller farrowing intentions. Over the past two years, the swine herd has grown by 1.1 million head (table 2). With the increase in animal numbers, pork production has climbed above 28 billion pounds.

The increase in production has coincided with a resurgence in pork exports, with USDA originally projecting 7.4 billion pounds for pork exports in 2025. However, the early weekly export data has not lived up to those expectations; and, while hog prices did slightly improve in 2024, USDA’s outlook shows a small decline in hog prices for 2025, with... In total, USDA’s projections are mixed for the livestock industry. The cattle sector continues to contract, leading to lower beef production and higher prices. The swine sector is growing, leading to higher pork production and lower prices. Shifting to the crop sector, the general outlook is similar to that for pork, higher production and lower prices.

Corn is following up on two record years—2023 was the largest crop in terms of production and 2024 was the best yield, which provided a lot of bushels for the corn market with which... During the 2024 marketing year (which we are in the middle of now), corn exports have been the major growth area for corn usage. Usually as exports grow, we would expect corn prices to rise.

Pdf The Outlook For The U S Economy In 2025 Ag Purdue Edu

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