Farmer sentiment weakened sharply in January as the Purdue University-CME Group Ag Economy Barometer Index dropped from 136 in December to 113 in January.
The Current Conditions Index dropped 19 points while the Future Expectations Index dropped 25 points.
The January barometer survey took place from Jan. 12-16.
FARMERS LOOK AHEAD
Among the five indices that made up the AEB Index, the largest decline was in the question asking participants whether US 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.
Respondents also expressed greater concerns about agricultural exports compared with last month.
One-half of the producers surveyed reported that their farm operations were worse off than a year ago. Moreover, looking ahead 12 months, 30% said they expected worse financial performance, compared with 20% who expected better financial performance.
INVESTMENT PROSPECTS
At a reading of 47, the Farm Capital Investment Index decreased 11 points from the previous month, reaching its lowest level since October 2024. Only 4% of the survey respondents indicated they planned to increase farm machinery purchases in the upcoming year.
Since 2020, each January barometer survey has included questions about farmers’ operating loans for the upcoming year. The percentage of respondents who said they expected to have a larger operating loan this year compared to a year ago rose to 21%, up from 18%.
In a follow-up question, producers who expected to have a larger operating loan were asked about the reasons for the increase. This year, 31% of producers who expected their loan size to increase said it was because they were carrying over unpaid operating debt from last year, up from 23% in 2025, 17% in 2024 and only 5% in 2023. These results were consistent with respondents’ concerns about their financial performance.
Farmers’ perspective on US agricultural exports was more pessimistic in January. Responding to a broad question about the future of agricultural exports, 16% of respondents looked for exports to decline over the next five years.
In contrast, only 5% of December respondents said they expected exports to decline.
When asked to focus more specifically on soybeans, a key agricultural export, 21% of corn and soybean producers in January said they expected soybean exports to decline over the upcoming five years, up from 13% in December. Increasing competition from Brazil was weighing on producers’ minds.
Eighty percent of corn and soybean producers said they were concerned or very concerned about the competitiveness of US soybean exports versus Brazil’s, with 44% indicating they were very concerned.
FARMLAND VALUE OUTLOOK
Respondents remained optimistic about short-term farmland values in January, but optimism regarding long-run land values waned. The Short-Term Farmland Value Expectations Index remained unchanged at 117. After reaching a new record high of 166 in December, the long-term index declined to 152 in January.
Alternative investments, net farm income, and interest rates were cited as the three factors having the most influence on farmland values.
This month’s survey included a question related to the Farmer Bridge Assistance Program announced in late December. Corn and soybean producers were asked about the use of these payments.
More than 50% of respondents indicated those payments would be used to pay down debt. Another 25% said they would use the payments to improve working capital. The remainder (10% said the payments would be used for family living or to invest in farm machinery (12%).
As in the last few months, producers were asked if the US is headed in the “right direction” or on the “wrong track”. The percentage of producers who indicated the US is headed in the “right direction” dropped from 75% in December 2025 to 62% in January 2026.
CATTLE, BEEF RECAP
The USDA reported formula and contract base prices for live FOB steers and heifers this week ranged from $237.60 per cwt to $241.45, compared with last week’s range of $233.00 to $240.00 per cwt. FOB dressed steers and heifers went for $369.10 per cwt to $378.85, compared with $365.91 to $371.92.
The USDA choice cutout Tuesday was up $2.50 per cwt at $370.71 while select was up $2.32 at $367.23. The choice/select spread widened to $3.48 from $3.30 with 101 loads of fabricated product and 17 loads of trimmings and grinds sold into the spot market.
The USDA-listed the weighted average wholesale price for fresh 90% lean beef as $414.58 per cwt, and 50% beef was $157.54.
The USDA said basis bids for corn from feeders in the Southern Plains were unchanged at $0.98 to $1.12 a bushel over the Mar corn contract, which settled at $4.28 1/2, up $0.02 3/4.
The CME Feeder Cattle Index for the seven days ended Monday was $375.01 per cwt, up $0.60. This compares with Tuesday’s Mar contract settlement of $367.92, up $1.57.