Ag Policy Blog

OMAHA (DTN) -- More than half of farmers surveyed in the Purdue University/CME Group Ag Economy Barometer said they will use their Farmer Bridge Assistance (FBA) payments to pay down debt.

Producers responding to the survey took a dive in optimism in January. Purdue economists noted the January barometer survey was Jan. 12-16, while USDA's January World Agricultural Supply and Demand Estimates (WASDE) report came out Jan. 12. Crop prices fell sharply after the WASDE reported a larger corn crop than expected.

Half of the farmers who responded to the survey said their farm operations are worse off than a year ago. Looking a year ahead, 30% expect worse financial performance compared to 20% who expect better financial performance.

The monthly barometer shows farmer sentiment dropped from 136 in December down to 113 in January. The barometer saw a spike of optimism when President Donald rump as elected last year, but the barometer has fallen back down in recent months.

Gauging current and future conditions, the Current Conditions Index dropped 19 points while the Future Expectations Index dropped 25 points.

"Among the five indices that make up the (Ag Economy Barometer) AEB Index, the largest decline was in the question asking participants whether U.S. agriculture would have good times or bad times in the next five years. The index for this question fell from 122 to 88, marking its lowest point since September 2024," Purdue economists stated.

Looking at farm equipment, only 4% of respondents indicated they plan to increase farm machinery purchases over the next year. The Farm Capital Investments Index declined to its lowest level since October 2024.

More farmers expect to take out larger operating loans than a year ago at 21% compared to 18% last year. Of those producers taking out larger loans, 31% expect to do so because they were carrying over unpaid operating debt from last year, up from 23% in 2025.

Despite an array of announcements about trade, farmers are also more pessimistic about exports. More producers expect agricultural exports to decline over the next five years -- 16% compared to just 5% in December.

Asked specifically about soybeans, 21% of corn and soybean farmers expect to see a decline in soybean exports over the next five years, an 8-point bump from the percentage of farmers who felt that way in December. Sill, nearly 48% expect soybean exports to remain about the same and nearly 32% expect to see soybean exports rise over the next five years.

Further, 80% of corn and soybean farmers said they were concerned or very concerned about U.S. competitiveness with Brazilian soybean exports with 44% saying they are very concerned.

Asked about how they will use the FBA payments expected to be issued at the end of the month, nearly 54% said they will use the aid to pay down debts. Another 25% will use the payments to improve working capital. Nearly 12% of the farmers will use the money to invest in machinery and nearly 10% of farmers will use the money to cover family living expenses.

Sixty two percent of farmers say the U.S. is heading in the right direction while 38% disagree. On the surface that would seem high, but the percentage who believe the country heading in the right direction has fallen 13-percentage point in one month.

The full survey can be viewed at https://ag.purdue.edu/…

Chris Clayton can be reached at Chris.Clayton@dtn.com

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