Gathering Farmer Sentiment Changes, Factors Fluctuate

Yeager: Sentiment means more than you think it does. You think it's an emotion? Well, it kind of is. At least that's what Michael Langemeier, from Purdue University, tells us this week in the MToM podcast. Every month, we usually report on the Purdue AG Economy Barometer. It comes out the first week of each month, and we usually put that into the TV show just like we do the Main Street Index or the Business Conditions Index. All three of those reports are dependent on farmer data — you pick up the phone, answer a couple of questions, move on. That data filters up to what you see on the show.

And that's exactly what we're going to talk about — how the sausage is made at Purdue University. Michael is the director of the Center for Commercial Agriculture and a professor in the Department of Agricultural Economics at Purdue. He's a Nebraska guy, spent time in Kansas, and has been in Indiana for quite a while. But he doesn't always know in the surveys where the information is coming from — not the zip code, not even the state. So this is really a mix of a lot of different views on how people see the next five years: biofuels, trade policy, the weather — all those things factor in. We'll learn about it now here in the M to M podcast. I'm Paul Yeager.

Thank you so very much for tuning in. A reminder: these episodes come out each and every Tuesday in audio and video form. If you want to send me an email about any podcast or give a rating, sharing is caring. Send me an email: paulyeager@iowapbs.org. Now let's get to our discussion.

Michael, what's the most rewarding part of your job at Purdue?

Langemeier: The most rewarding part right now is working on the AG Economy Barometer. Part of that is because it takes quite a bit of my time — it's a monthly survey. We develop the survey, summarize it, develop the report, and it comes out the first Tuesday of every month. We have quite a few interviews that week. It takes up a lot of time, but it's a very enjoyable activity because you get that combination of talking to people about the report and, as part of those conversations, I usually bring up what's going on in production agriculture — net farm income, other ag finance topics. That's my primary area. But it also gives us a chance to get a monthly report that's fresh. So there are just a lot of reasons why it's my favorite activity.

Yeager: I totally jumped the gun into the activity. What set you up to do this job? What's your background?

Langemeier: I grew up on a farm in Nebraska, about 60 miles northwest of Omaha. When you grow up in rural Nebraska, it's natural to migrate toward the University of Nebraska-Lincoln. I got a bachelor's degree in agricultural economics there, enjoyed myself, and stayed on for a master's. I was still enjoying myself as a graduate student — the job market was a little tight, but I'm an academic at heart. I just love academics: the learning, the reading, the writing. So I stayed in school and got a PhD at Purdue, graduating in 1990.

The job market was tight again for graduate students in 1990, but I was lucky enough to land an outreach job in agricultural economics at Kansas State University. I was there from 1990 to 2012, then had an opportunity to move back to Purdue and work for the Center for Commercial Agriculture.

This project — the AG Economy Barometer — came about when we were approached in mid-2015 by the CME Group. They were looking for someone to develop a producer sentiment index similar to the Consumer Sentiment Index at the University of Michigan, but strictly for agricultural producers in the United States. We developed a proposal. We were one of three universities — I don't know who the other two were — but we were lucky enough to land the project, and we haven't looked back.

Yeager: When you say sentiment, I want to get into that, because it's always a question when I read your reports. I'll tease that — go ahead.

Langemeier: It's not the same as facts on the ground. That's one of the things we found out very early on. In fact, when we started, one of my colleagues said, "This is going to be kind of uninteresting because it's going to follow corn prices." And it does, to some extent — obviously, an increase in corn, soybean, or wheat prices matters. Those are the primary enterprises in the barometer, though beef, swine, dairy, and cotton producers are also involved. But there's a lot of other things going on. Sentiment is not corn price. You're not asking their opinion about the corn price in December 2026. You're asking their thoughts — for example, do you think production agriculture can have good times or bad times in the next five years? It's more subjective than objective.

Yeager: Do you find challenges with that definition — the scientific versus the opinion?

Langemeier: As a social scientist, I've always thought there's more to our science than just profit maximization and facts on the ground. A big part of economics is expectations. Expectations drive land values — you're buying an asset you're going to hold for decades. You're really thinking about what your return is going to be for the next 30-plus years. That's the spirit of this producer survey: asking people what agriculture is going to look like in the next five years, but also what it looks like today.

It doesn't bother me that it's more sentiment-based than price-based. Having said that, I also give presentations on outlook and other topics based on fundamentals. Fundamentals are important to sentiment, but they're certainly not the only thing. Geopolitical shocks matter — the war in Ukraine made a difference to sentiment. Trade matters — if trade looks like it's slowing or speeding up, that's incorporated. And elections matter. There were pretty big movements in the sentiment index in 2016, 2020, and 2024, with the biggest movements in 2016 and 2024.

Yeager: Does that tie to who won?

Langemeier: What I call the long-run policy environment. They're not just looking at current policies — they're thinking, "With this new administration, tax policy is going to change, monetary policy is going to change, environmental policy is going to change." If that looks more amenable to production agriculture with the person elected, that improves sentiment, and vice versa.

Yeager: Sometimes it looks like, "Oh, somebody from that party — I look at agriculture more optimistically." That's where questions come up: is this really telling me something about their financial or farm beliefs, or just an extension of political beliefs?

Langemeier: The way I'd counter that is sentiment is not static with regard to that long-run policy environment. Take the 2024 national election — sentiment went up substantially in November and December, but it didn't stay at those levels. If there's any slippage in what they think the policy environment is going to look like, as we got into issues related to tariffs and trade, sentiment is impacted. Yes, there's certainly some sentiment driven by who's in office — I'm not going to say that's not important. But if the environment looks different even with that same person in office, sentiment either improves or deteriorates.

One of the reasons sentiment is lower right now than a year ago is the long-run policy environment doesn't look quite as positive. Some of the uncertainty related to trade is still with us. And recently, of course, the large increases in nitrogen and diesel prices — those things matter. That attitude toward policy is not static.

Yeager: We also use Creighton University's Business Conditions and Main Street Index on the program. Ernie does about a ten-state region. For your questionnaires, what are your major states or how many states?

Langemeier: Our survey is U.S.-based. When we developed it in 2015, we wanted to reflect value added in U.S. agriculture, but we did leave some enterprises out because we didn't feel we had the knowledge to really address them — vegetables, tree nuts, fruits. So it's corn, soybean, wheat, cotton at the U.S. level, then beef, swine, and dairy at the U.S. level. Two-thirds of the producers are corn, soybean, and wheat. But if you looked at just the people who produced corn in 2025, that was close to 80% of respondents.

When I say two-thirds grow corn, soybean, and wheat, that means it's their predominant enterprise. We still have a lot of diversified farms in this country — particularly in what I call the Western Corn Belt, Kansas, Nebraska, the Dakotas. There are still many farms with different enterprises including cow-calf or other livestock in addition to crops. So it really covers both specialized operations and diversified operations.

Yeager: Is it the same people each month?

Langemeier: No — that's very important to note. We try to keep the demographics the same, surveying full-time farms with gross farm income above $500,000. That's very large by today's standards, but it ensures most respondents are full-time operators. We also try to keep the enterprise mix the same — shooting for about two-thirds corn, soybean, wheat every month. The characteristics of the farms are the same, but it's not the same people. A couple people have told me they actually got calls and answered the survey in the last ten years, but there are probably very few who've even been called twice.

Yeager: That's amazing — 11 years in and you're not usually getting somebody called twice. It just shows how many farmers are out there.

Langemeier: That meet our characteristics. If you looked at USDA numbers, it would be 10% or more of all the farms in the U.S. — so you're dealing with 200,000 to 250,000 potential farms.

Yeager: Here's the thing though — there's always this question about data. Last year analysts came on the show, talked to farmers, and they said, "We don't believe what USDA is putting out because that's not what we're seeing." There's always that. I know so-and-so was called and didn't turn their survey in — "I'll show the government." Tell me why it's important to respond when somebody asks you a question about what's going on.

Langemeier: One thing we do — and I think this gives us a little bit of a leg up — is we say this is such-and-such from Purdue University. We're not calling from USDA NASS or anything like that. I think people are more likely to answer a question from a university than from the federal government. Having said that, we still have quite a few people who don't answer the phone or hang up, and that's a problem with these types of surveys.

We've really struggled thinking about how to do this differently, because I always worry about what's going to happen when more and more people don't answer the phone. They look at the number, don't recognize it, and don't pick up. A lot of people do that. We've thought about other ways to conduct this survey and there is no Plan B at this time. A lot of my colleagues use Qualtrics, but the problem is we really want to reach 400 people every single month. With an online survey, you don't have as much control over who's answering — that's a big problem. And in a month like April or May when people are in the field, you'd get a fraction of the returns compared to February. There's no easy solution, but what we've done has worked pretty well so far.

Yeager: And it's easier to say "higher, lower, same" when you're in the field — much easier than picking up a device.

Langemeier: We discuss that back and forth, and I was pretty insistent — as were my colleagues — that we keep these questions very simple. Higher, lower, same. Sometimes we'll have questions with five choices, which are a little more difficult, but we still keep those very simple. One example: we ask a question related to what is your biggest concern, with buckets like input costs, input availability, interest rates, and a couple others. It's a longer question, but we keep the buckets really simple. That's really, really important.

If you look at online surveys, the danger is they want to make them really complicated — ranking a bucket of concerns, for example. We never do that kind of thing because it's just too difficult the way we're trying to conduct this survey.

Yeager: When someone responds, do you know their general geographic area?

Langemeier: Our internal review board at Purdue makes sure that we don't see it. We have a Kansas City firm that does the calls for us, so we never get that information — on purpose.

Yeager: So an outside firm makes the phone calls. They obviously know where respondents are from —

Langemeier: Right. And I've been asked that question a lot by researchers. The short answer is no, but even if we did, when you have a sample of 400 spread all over the country, it would be very difficult to say anything statistically about the people in Nebraska this month versus the people in Indiana.

Yeager: That's exactly where I was going — is there a geographic difference in the way people view things?

Langemeier: We don't have a big enough sample to really capture that. The only thing that would be interesting to me — and it's just not part of our operating agreement — is whether the Corn Belt is different. Do people in the Corn Belt states answer questions differently than people out West or in the southern part of the country?

The only way we separate producers is into primarily livestock versus primarily crop. About a third of the survey gets more than 50% of revenue from livestock — beef being the largest by far — and the other two-thirds are primarily crop producers. I've done quite a few articles for Farm Doc and the Center for Commercial Agriculture website looking at sentiment differences between crop and livestock producers. But that's about as far as we go in terms of looking at subsets of the data.

Yeager: Let's talk about the beef producer versus the crop producer right now. What's the difference in how they're feeling?

Langemeier: Livestock sentiment is through the roof compared to crop. For one of our questions — "Do you think we'll have good times or bad times in the next five years?" — for livestock, 70% say good times. For crop, it's closer to 30%. Extremely wide differences in sentiment, particularly short-term but really both short-term and long-term. It's probably the biggest gap we've seen since we started ten years ago.

Yeager: I keep hearing from certain people who study markets — not necessarily the fundamental side but the technical side — that we might just be beginning the cattle cycle. You think sentiment is high now? Wait till that data gets into the mainstream.

Langemeier: It's a really tough environment. The heifers are worth a fortune, so to make the decision to keep a heifer back is very expensive, and you don't know how long this is going to last. Like land, you're not making this decision for next year — you're making it for the next several years. Tack on to that the fact that we still have a lot of drought in a lot of the cow-calf areas. It's just very difficult to increase the size of the herd.

I have a colleague here from Brazil, and while prices aren't quite as strong there, they've also had a big run-up in the last year or two, because one of the things happening in Brazil is they keep taking marginal pasture ground and putting soybeans on it. That makes beef hard to expand there. When global demand is high, we're not going to get out of this anytime soon.

Yeager: Let's look at issues that have changed over the last two to four years compared to the last year. You mentioned inputs — diesel and fertilizer — that's an obvious discussion point. When you mentioned Brazil, that's a competitor. China is a competitor but also a buyer. Where is the farmer right now in how they're responding? How has that changed in the last 6 to 12 months versus the last five years?

Langemeier: Trade is partially responsible for sentiment going from pretty high levels in late 2024 to something lower. A lot of concerns about trade and tariffs. When you talk about Brazil specifically, we added a question a few months back — two months in a row — asking whether respondents were concerned about the competitiveness of U.S. soybeans compared to Brazil. 70% said they were concerned or very concerned.

When we look at the 2018-19 trade wars with China and compare to today, it's really different because Brazil has increased production dramatically since then — they were much closer to being able to supply all the soybeans China needs. That added to concerns about the tariffs. If we lose this market, are we going to get it back?

But one of the things really impacting sentiment going back to Covid is input costs. The biggest concern has been high input costs ever since Covid — that has not changed. It's been over 40% since Covid started and was 46% in the last two months, for obvious reasons. Crop prices — even though they aren't very good — that concern has ranged from 25 to 35%, a distant second. That's a little unusual in my career. Most of the time, if you ask someone what they're concerned about, it's that prices are low. Not just high input costs. The world has just changed our cost structures because of Covid.

Yeager: I think of all the episodes I've done talking about logistics and supply chain challenges — and that has just crossed out on your survey, replaced by inputs. And it's still always there. Are you putting inquiries about the future in your questions?

Langemeier: The AG Economy Barometer is five questions, and three of those are future-oriented.

Yeager: How far out?

Langemeier: Five years out. We also have two land questions — one about land values in the next 12 months, which we've been asking since January 2019, and a land value question looking five years out. Sometimes we'll ask things like — and I'm thinking about adding this next month or the month after — do you think the ethanol industry will expand in the next five years? Do you think renewable diesel markets will be stronger five years from now? Quite often we ask real long-term questions like that because I want to get at that long-run policy environment and what people think things will look like five years from now. Then I can relate those questions back to the actual AG Economy Barometer index.

Yeager: How many questions total each month?

Langemeier: Usually 25 to 30. About 20 questions have been the same for probably two or three years now — that's the core. Then we have extra questions more specific to current policies. For example, last month we asked what impact do you think the Iran conflict is going to have on your net farm income in 2026. So we look at timely things in addition to the 20 core questions.

Yeager: I also notice that your report includes the dates you actually took the survey, because things can change right before or after you make those phone calls.

Langemeier: Yes, that's to make sure people understand that if something occurred, we might have called people before that happened. This happened recently — we did the survey in mid-February, and the Iran conflict didn't heat up for another couple of weeks. So it really didn't have much impact in the February survey, some in March, but the full impact wasn't really noticed until April. It's just a timing issue.

Yeager: What's the future of the survey?

Langemeier: Hopefully the CME Group continues to enjoy what we're doing. We have a two-year rolling contract and are funded through December 2026. Hopefully we'll have a two-or-more-year extension this December.

Yeager: Do you have alumni — grad students who helped with the project — who have gone on to other positions and called you back for guidance?

Langemeier: We're probably seeing more on the research side. Now that we have enough data, there's quite a bit of interest from researchers here and from people who were graduate students while the survey was taking place. We have a couple of relatively new faculty members really trying to dig into the survey and relate the AG Economy Barometer to what's going on in the rest of the world. Is it related to uncertainty indexes? Changes in corn prices? Changes in monetary policy? That's a work in progress. It would be very interesting to me because it would help me explain why the survey moved in a given month.

I always look at what corn and soybean prices did from the previous survey to the current one to see if that made any difference. A lot of times it obviously did, but there are other things that happened too. The Iran conflict is a classic example — that moved the needle.

Yeager: I'll ask a couple of historical questions to finish up. You started in 2015. What's been the highest and lowest period in these 11 years?

Langemeier: The highest was after the 2016 election. It also got close to that in 2021-22 when we had really strong prices and input costs hadn't increased yet — about a year where prices had risen and input costs were still relatively low, so profits were really high. Those are the two highs.

Probably the lowest was the first six months — 2015-16 was not a great time in agriculture. The index is most of the time above 100, since the first six months served as the base period. There have only been a few times it dropped below 100. One of those was April 2020, right at the beginning of Covid. I have never seen producers so down, so negative — and that's anecdotal evidence from talking to producers and having meetings on the phone. It showed clearly in the sentiment. Nobody knew how things were going to move forward: what was going to happen to prices, input costs, crop prices. All that uncertainty really took the index down.

Uncertainty really matters. If the world looks really fuzzy and uncertain, sentiment plummets. At that time nobody knew what was going to happen.

Yeager: You sound like you've been listening to our show. Producers want certainty — whatever the policy is, set it, forget it, move on, we'll adjust as needed. But this whole up-and-down, in-and-out, yes-and-no is super hard to plan around.

Langemeier: It comes in two fashions. One is that switching between administrations can involve such big differences in the policy environment that it's so hard to plan. I think the farm bill used to be a better buffer to smooth that out, but for whatever reason it seems really bumpy today. And when the administration is hard to read and keeps changing its mind, that adds to cautious uncertainty — "I thought I knew where this was heading, and now I don't."

Yeager: I like to use the word "indigestion" for uncertainty — it does cause some consternation.

Langemeier: Yes, definitely.

Yeager: All right, Michael, I appreciate the insight. I always look forward to the first week of the month when the release comes out to see what happened in rural America from your viewpoint. Thank you, Michael.

Langemeier: You bet. Take care.

YEAGER: We are produced at Iowa PBS. Our production supervisor is Sean Ingrassia. His crew is Reid Denker, Kevin Rivers, Julie Knutson, Neal Kyer, and David Feingold. The executive producer of Market to Market is David Miller. I'm Paul Yeager. We'll see you next time.