Farmer Sentiment Falls in May as Input Costs Continue to Weigh on Ag Economy

Farmer sentiment slipped again in May as rising input costs and financial uncertainty continued to pressure the farm economy. That’s according to the latest Purdue University-CME Group Ag Economy Barometer. The index declined from 121 in April to 119 in May. The Current Conditions Index fell eight points to its lowest level since December 2024, while the Future Expectations Index edged up one point. Input costs remained producers' top concern. Fifty-one percent of farmers identified high input costs as their biggest challenge, the highest level recorded by the survey. Nearly half of respondents, 46 percent, said rising expenses are preventing improvements in their financial position. Only 14 percent of farmers said their operation is better off financially than a year ago, while 22 percent expect conditions to improve over the next 12 months. The Farm Capital Investment Index dropped three points to 41, signaling reduced willingness to make major purchases. “High input costs are limiting improvements in their financial position this year,” researchers noted.

Trump Cuts Tariffs on Ag Equipment to 15 Percent

President Donald Trump has announced tariff reductions on certain agricultural and industrial equipment, a move that could help ease some cost pressures facing farmers and machinery dealers. Under a new proclamation, tariffs on products like harvesters, bulldozers, forklifts, and HVAC equipment will be reduced from 25 percent to 15 percent. The Wall Street Journal said the administration also lowered tariffs to ten percent on products manufactured abroad that contain at least 85 percent U.S.-produced steel, aluminum, or copper. The action comes as farm equipment manufacturers continue to face challenges from higher raw material costs, labor shortages, and global trade uncertainty. Industry reports indicate nearly 90 percent of equipment dealers expect machinery prices to rise between one percent and six percent through the end of 2026. Despite the headwinds, some analysts see signs of stabilization. According to the Association of Equipment Manufacturers, combine sales rose 3.4 percent year-over-year in April, while tractor sales declined about one percent.

Australian Wheat Crop Drops in 2026

Australia's wheat crop is expected to decline sharply this year, a development that could lend support to global wheat prices as farmers worldwide monitor tightening supplies. The country's 2026 wheat harvest is projected at 26.7 million metric tons, down about nine million tons from last season and the smallest crop in three years. Australia is one of the world's leading wheat exporters, and lower production could further tighten global supplies after weather-related crop losses in parts of the United States helped push wheat prices to two-year highs earlier this spring. Australia’s Ag Bureau said soaring fertilizer costs are a major factor behind the smaller crop forecast. Fertilizer prices have surged following disruptions to supplies from Gulf nations amid the conflict involving Iran, leading some growers to reduce fertilizer applications. “High prices will likely cause farmers to fertilize less, reducing yield potential,” the Ag Bureau said in its quarterly crop report. Significantly dry conditions have also weighed on production prospects. 

FFA Members to Gather in Washington for National Leadership Conference

More than 1,800 FFA members and 250 chaperons will travel to Washington, D.C., this summer for the 2026 Washington Leadership Conference (WLC), one of the FFA Organization’s premier leadership development events. The conference runs from June 2 through July 10 in five week-long sessions and is designed to help students develop leadership skills while exploring the nation’s capital. Participants will learn principles such as exploration, encouragement, advocacy, and service, while creating a Living to Serve Plan they can take home and implement in their communities. The week-long program includes leadership training, visits to national monuments, tours of Capitol Hill, and opportunities to develop community service projects. Students will also visit Arlington National Cemetery or museums on the National Mall before concluding the conference with a reflection on their experience. “The Conference inspires FFA members to become change makers in their communities,” organizers said, emphasizing the conference’s focus on leadership, service, and civic engagement.

Cotton Groups Applaud USDA’s Great American Cotton Plan

Farm and industry organizations are voicing strong support for the U.S. Department of Agriculture’s new Great American Cotton Plan, unveiled last week by Agriculture Secretary Brooke Rollins. The initiative is designed to strengthen the U.S. cotton industry by boosting demand, improving export competitiveness, supporting domestic manufacturing, and reinforcing policies that promote American agriculture in global markets. The American Cotton Shippers Association said the plan represents an important step for growers, merchants, manufacturers, and rural communities that depend on cotton production. According to the group, cotton supports more than 125,000 U.S. jobs and contributes over $21 billion annually to the U.S. economy. The National Cotton Council also welcomed the announcement, noting it complements recent federal actions aimed at strengthening the farm safety net and improving risk management tools for producers. “The plan prioritizes cotton demand growth, export competitiveness, domestic manufacturing, and policies that reinforce American agriculture’s global leadership,” the American Cotton Shippers Association added.

Women in Agriculture Ready to Lead

The American Farm Bureau Federation Women’s Leadership Committee, with support from JBS and CoBank, is unveiling results of a national study to guide programming for women in agriculture over the next five years. Conducted through online surveys and focus groups, the study highlights the roles women play in farming and ranching and identifies opportunities for greater support. Findings show strong confidence among women in balancing farm and family responsibilities and widespread interest in leadership development, with nearly nine in ten respondents interested in future leadership roles. The report identifies five key areas for improvement: caregiving and time constraints, skills training, leadership opportunities, financial security, and wellbeing. About 44 percent expressed interest in technical or equipment training, while 56 percent sought business and financial management education. “Women in agriculture are increasingly stepping into leadership while balancing many responsibilities,” said Isabella Chism, Women’s Leadership Committee Chair. “This study ensures everyone has a seat at the table.”

Wednesday Watch List

Markets

On Wednesday, the EIA will release the weekly Petroleum Status report at 9:30 a.m. CDT, including last week's ethanol production. There are no other major reports scheduled. Traders will as always watch U.S. weather as well as the situation in the Middle East as fighting has again escalated through this week.

Weather

A system that has been spinning around the Northern Plains and Canadian Prairies is finally starting to push eastward on Wednesday, but will continue scattered showers and thunderstorms in the region throughout the day. Showers extend down through the Plains as well, producing some much-needed rainfall in some very dry areas of the country.