While the overall index declined, the Index of Future Expectations dropped 16 points to 123, showing sharp pessimism about what's ahead. This is the lowest reading in nearly a year. Meanwhile, the Current Conditions Index ticked up slightly to 129, indicating that producers feel stable about their present situation despite loterm concerns.

The contrast reveals a deepening divide in the ag sector. Crop producers expressed significantly less optimism than livestock operators, a sentiment driven by weak commodity prices and shrinking margins.

Livestock Profitability Soars as Crops Struggle

The disparity stems largely from market dynamics. Beef cattle operations are enjoying record profits, thanks to the lowest U.S. cattle inventory since 1951, which has driven prices sky-high. In contrast, crop producers are grappling with falling returns, with many marketing below breakeven levels.

USDA projections reinforce these trends:

2025-26 corn price forecast: $3.90/bushel

Soybean forecast: $10.10/bushel

Both figures are well below cost of production for many U.S. growers, helping explain why the Farm Financial Performance Index remains below 100, registering at just 91 in August.

Capital Investment Sentiment Rises Slightly

Despite these financial pressures, the Farm Capital Investment Index improved 8 points to 61, likely buoyed by livestock producers' stronger outlook. This optimism didn't extend equally to all areas of ag, however.

Land Values Outlook Softens but Remains Positive

The Short-Term Farmland Value Expectations Index dipped 3 points to 112, continuing a three-month decline. Still, the index's position above 100 suggests that more farmers expect land values to increase than decrease. Notably, 75% of crop producers anticipate steady cash rental rates in 2026, signaling moderate confidence in land-based equity.

Rising Debt Levels Reflect Growing Stress

Worries about farm financial health are becoming more pronounced. This August, 22% of farmers said they expect to increase their operating loans for 2026, up from 18% in January. Among those, 23% cited the need to carry over unpaid 2025 operating debt-a sharp jump from 17% in January 2024 and just 5% in January 2023.

This trend suggests a growing number of producers are struggling to cover annual expenses without accruing additional debt. As input costs remain elevated and commodity prices falter, debt carryover may become more widespread.

Taken together, the August barometer reveals that many U.S. producers are bracing for tighter margins and more difficult decisions heading into harvest. While livestock producers remain insulated by market highs, crop-focused operations face rising financial stress that could influence equipment purchases, land expansion, and input use.

With the next Farm Bill still under negotiation and interest rate policies in flux, farmers will need to closely monitor policy developments and fine-tune risk management strategies through the end of the year.