Farmer Sentiment Takes A Big Hit In January

American farmers are feeling less confident about the ag economy.  Sentiment weakened sharply, as the January Purdue University/CME Group Ag Economy Barometer fell 23 points month-over-month to a reading of 113.

Barometer Hits A 16-Month Low

Purdue Professor of Ag economics Michael Langemeier said this decline reflects growing pessimism about both current conditions and the future of the farm sector.

“We haven't seen this lower reading since September 2024, which of course was before the 2024 election," he said.  "So, this was a pretty big shock in terms of sediment. Last year, the index was 28 points higher, sitting at 131. So, it's a big change from last year too.”

Langemeier said the Current Conditions Index dropped 19 points to 109, while the Future Expectations Index fell 25 points to 115.

He added one specific question indicated why farmers are so unsure about the future.

"Do you think it is more likely that U.S. agriculture during the next five years will have widespread good times or widespread bad times? The percentage that indicated good times dropped sharply from 46% to 34%," Langemeier said.  "The percentage that said bad times went from 24% to 46%, so a very large in the percentage that indicated that they thought agriculture was going to have bad times in the next five years.” 

Farmers Concerned About A Host Of Issues

Producers reported worsening farm financial conditions compared with a year earlier.  Half of the farmers surveyed indicated that their operations were worse off than just 12 months ago.

When looking ahead to the next year, more producers expect conditions to worsen than to improve; with 30% anticipating weaker financial performance in the coming year, compared with 20% who expect improvement.

Producers also expressed increased pessimism about the outlook for U.S. agricultural exports.  In the January barometer, 16% of respondents said they expect exports to decline over the next five years, up considerably from the 5% reported in December.

Is The U.S. Moving In The Right Direction?

The broader outlook for the U.S. economy also declined.  62% of respondents say the U.S. is headed in the "right direction", down from the 75% in December. 

Click Here to read the entire barometer.  The Purdue University/CME Group Ag Economy Barometer was conducted January 12-16, and 400 farmers were surveyed.

If you have a story idea for the PNW Ag Network, call (509) 547-1618, or e-mail glenn.vaagen@townsquaremedia.com