Farmer sentiment weakened sharply in January, as the Purdue University Ag Economy Barometer fell 23 points from December to a reading of 113 according to the Purdue University Center for Commercial Agriculture.
Purdue’s agricultural economists says the decline reflected growing pessimism about both current conditions and the future outlook for U.S. agriculture; the Current Conditions Index dropped 19 points to 109, while the Future Expectations Index fell 25 points to 115.
The largest shift was in producers’ long-term outlook for U.S. agriculture, with the index that measures expectations for widespread good and bad times over the next five years falling to its lowest level since September 2024. Producers also expressed greater concern about agricultural exports than last month.
The survey was conducted Jan. 12-16, coinciding with the U.S. Department of Agriculture’s release of the World Agricultural Supply and Demand Estimates report on Jan. 12.
Producers reported worsening farm financial conditions compared with a year earlier. Half of the farmers surveyed indicated that their operations were worse off than a year earlier. Looking ahead to the next 12 months, more producers expect conditions to worsen than to improve. Thirty percent of respondents anticipate weaker financial performance in the coming year, compared with 20% who expect improvement. Reflecting this more cautious outlook, the Farm Capital Investment Index fell 11 points in January to 47, its lowest level since October 2024. Just 4% of producers said they plan to increase farm machinery purchases over the next year.
“What stands out this month is the growing number of producers who report that higher operating-loan needs stem from carrying over unpaid debt from the previous year,” said Michael Langemeier, the barometer’s principal investigator and director of Purdue’s Center for Commercial Agriculture. “That points to increasing financial pressure heading into the year ahead.”
Since 2020, each January barometer survey has included questions about farmers’ operating loans for the upcoming year. Twenty-one percent of respondents said they expect to have a larger operating loan compared with a year earlier, up from 18% last year. Among producers anticipating an increase, 31% cited carryover of unpaid operating debt from the prior year as the primary reason. This percentage has risen steadily in recent years, increasing from just 5% in 2023 to 17% in 2024 and 23% in 2025. The results align with producers’ growing concerns about farm financial performance.
Producers also expressed increased pessimism about the outlook for U.S. agricultural exports in January. When asked about export prospects over the next five years, 16% of respondents said they expect exports to decline, up from 5% in December. Concerns were even greater among corn and soybean farmers when the question specifically addressed soybeans, a key agricultural export. This month, 21% of corn and soybean producers said they expect soybean exports to decline over the next five years, compared with 13% the previous month. Increasing competition from Brazil is also weighing heavily on producers’ minds. Eighty percent of corn and soybean producers said they were concerned or very concerned about the competitiveness of U.S. soybean exports relative to Brazil, including 44% stating they were very concerned.
Producers remained optimistic about short-term farmland values in January, while their longer-term outlook became more cautious. The Short-Term Farmland Value Expectations Index was unchanged at 117. After reaching a record high in December, the Long-Term Farmland Value Expectations Index fell 14 points in January to a reading of 152. Respondents cited alternative investment opportunities, net farm income and interest rates as the factors expected to have the greatest influence on farmland values.
The January survey asked corn and soybean producers how they expect to use payments from the Farmer Bridge Assistance Program announced in late December. More than half of respondents said they plan to use the payments to pay down debt, while 25% indicated the funds would be used to improve working capital. The remaining respondents said the payments would go toward family living expenses (10%) or investment in farm machinery (12%).
Producers’ broader outlook for the U.S. economy also softened. As in recent months, respondents were asked whether the U.S. is headed in the “right direction” or on the “wrong track.” In January, 62% of producers said the U.S. is headed in the “right direction,” down from 75% in December 2025.
Source: The Purdue University Center for Commercial Agriculture.
