Ind. — Today’s combination of elevated input costs and tighter commodity margins is changing the way farmers think about risk
Long-term profitability will depend less on producing a good crop and more on earning a profitable price for it, said Michael Langemeier, agricultural economics professor and director of the Center for Commercial Agriculture at Purdue University.
In the latest Purdue-CME Group Ag Economy Barometer, producers identified crop and livestock prices as the biggest long-term challenge facing their operations.
“That’s an important shift because it tells us where producers think profitability will be won or lost in the years ahead,” Langemeier said.
Commodity prices, at 30%, topped the list by a wide margin. Farm transition, at 17%, came in second, followed close behind by cost control, at 16%, in third.
<a href="https://bitcomme.com/tuya-reports-second-quarter-2026-unaudited-financial-results/” title=”Tuya Reports Second Quarter 2026 Unaudited Financial Results”>Financial considerations and weather, each at 13%, were next. Trade and government policy, at 7% and 3%, respectively, ranked even lower.
“Now, that doesn’t mean that those issues aren’t important, but producers are telling us that maintaining profitable prices or managing through periods of lower prices is their biggest concern. And given today’s margin environment, that’s very understandable,” Langemeier said.
“We’re in a period where costs remain historically high, while commodity prices, particularly those for crops, have come off the highs we saw a few years ago. That combination leaves much less room for error.”
Similarly, when producers were asked what type of risk management education would help them the most in the upcoming year, 44% chose marketing.
“Not financial management. Not strategic planning. It wasn’t even close,” Langemeier said.
Marketing was by far and away, the most commonly chose item. That was true for both crop and livestock producers, but it was particularly true for crop producers.
“When farmers identify commodity prices as their biggest long-term challenge, it makes sense that improving marketing decisions becomes their highest educational priority,” Langemeier said.
Marketing is one of the few tools producers have to actively manage price risk.
“You can’t control the market, but you certainly can try to mitigate risk associated with the market,” Langemeier said.
“For example, you can influence when you price grain, how you spread sales over time and whether you use contracts or other marketing tools such as options to reduce risk. Those decisions become increasingly important when profit margins are tight.”
Despite these concerns, producers weren’t entirely pessimistic. The overall Ag Economy Barometer improved — rebounding from 113 in June to 126 in July — as corn and soybean prices strengthened during the survey period.
In particular, the Index of Current Conditions and the Index of Future Expectations both improved.
The Farm Capital Investment Index also moved higher, suggesting producers felt somewhat more comfortable making major investments than they did just a month earlier.
“So, this isn’t a story about farmers losing confidence. It’s really a story about recognizing where the biggest challenges are likely to come from,” Langemeier said.
“Even with better sentiment, producers understand that long-term profitability depends heavily on managing through volatile commodity markets.”
One other result reinforces that point: Only about 13% of producers said their farm was financially better off than a year ago — and when looking ahead one year, producers were almost evenly split between expecting their operation to improve and expecting it to get worse.
“This tells us that optimism has improved, but uncertainty remains,” Langemeier said. “Higher grain prices helped sentiment this month. The question is whether stronger prices can be sustained and whether they increase even more.”
The barometer is a reminder that confidence can improve quickly when markets move in the right direction, but it also highlights something much more fundamental.
“Farmers believe the biggest challenge over the next decade isn’t simply producing a good crop — it’s earning a profitable price for it, and that’s why marketing continues to be one of the most valuable management tools producers can develop,” Langemeier said.
