January 6, 2026 • 18 mins
Farmer sentiment dipped slightly in December, with the Purdue University/CME Group Ag Economy Barometer dropping 3 points to 136. The decline was attributable to a softening in producers’ long-term outlook. The Future Expectations Index fell 4 points from the previous month to 140, while the Current Conditions Index remained steady at 128. Crop producers expressed increased concern about the competitiveness of U.S. soybean exports as Brazil expands its role in global markets, contributing to the more cautious outlook. The survey was conducted Dec. 1-5, 2025.
Purdue ag economists James Mintert and Michael Langemeier review the results from the Ag Economy Barometer and give their insights into farmer sentiment and the farm economy.
The Ag Economy Barometer sentiment index is calculated each month from 400 U.S. agricultural producers’ responses to a telephone survey. Further details on the full report is available at https://purdue.edu/agbarometer. Slides and the transcript from the discussion can be found at https://purdue.ag/agcast204.
You can find the FULL video episode on our YouTube channel. Visit https://youtu.be/0Jnm3_yti_g to subscribe and watch.
Podcast provided by Purdue University's Center for Commercial Agriculture. For more economic information and insights on the Ag Economy Barometer, visit us at http://purdue.edu/commercialag.
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Episode Transcript
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(00:05):
Welcome to Purdue Commercial AgCast, thePurdue University Center for Commercial
Agriculture's podcast featuring farmmanagement news and information.
I'm your host, James Mintert,Emeritus Professor of Ag Economics
here at Purdue University.
And joining me today is my colleague,Dr. Michael Langemeier, who's
the director of the Center forCommercial Agriculture and also a
professor of ag economics at Purdue.
We're gonna review the results fromthe December 2025 Purdue University-CME
(00:29):
Group Ag Economy Barometer surveyof farmers from across the nation.
Each month we survey 400 farmersacross the U.S. to learn more about
their perspectives on the ag economy.
This month's ag barometer surveywas conducted from the first
through the 5th of December.
And you know, Michael, as you look at it.
The barometer fell threepoints this month to 136.
(00:50):
That's about the same as this time lastyear, but it does leave the index 22
points lower than it was back in May,which was the index as high point in 2025.
And you know, if you look at what wasgoing on in terms of what drove the
change, Current Condition Index at128 was unchanged from a month ago.
That left the Current Condition Index,at year end, about 18 points below its
(01:13):
2025 peak, which was also back in May.
Future expectations did drop, and that'swhat drove the change in the barometer.
It was down four points to a reading of140, that leaves that index down 24 points
from its 2025 peak, which was also in May.
So I guess two questions,Michael, were you surprised
at the drop in the barometer?
And more importantly, maybe were yousurprised at the fact that the motivator
(01:37):
was the future expectations change?
It, it, it's always hard to tell exactlywhat, what's gonna happen here and, and
in a kind of a short month, if you will.
I mean, there wasn't as much time betweenthe surveys as there typically is.
I think there was only threeweeks, uh, rather than four weeks.
And I don't know ifthat factored in or not.
But, but there really, there reallyhasn't been a lot of news or a lot of
changes, uh, you know, changes in policy.
(02:00):
You know, that, that have came about.
And so it wasn't real surprising thatit, that it was relatively stable.
Uh, you know, I thought maybe there'dbe a little bit of strengthening in
the current rather than the future.
And so that's kind of theway I, I looked at that.
I, I don't think the long run policyenvironments necessarily changed, uh,
in the last month, but, uh, that'sjust kinda my viewpoint on that.
(02:20):
Yeah, I was a little surprised atthe drop in the future expectations.
Uh, I was kind of looking for achange in the Current Condition Index.
Yes.
But I, you know, I don'twanna overplay that 'cause of
the, the changes were small.
They're small.
Yeah.
So one of the things that was kind ofinteresting is the fact that if you look
at the report and, and look at the surveyitself, when we ask people about over
(02:43):
the next five years are widespread goodtimes of expected in crops or livestock.
The drop was in livestock, right?
I mean that was, that was, uh,I dunno if it's not unexpected,
but it was an eight point drop.
It went from 49% saying good,uh, good times to 41%, almost
no change in the crop side.
(03:04):
Two points.
And it's remarkable that that drop is like30 points, uh, in the last two months.
And so that, that's a bigdifferent, that's a big
change in the last two months.
And most of that I thinkis coming outta cattle.
Yes.
Right.
And, uh, people all of a suddenare less confident about what's
going on in, in the cattle sector.
They were really, really positivefor a long time there, but all of
a sudden, and, and you know, we'restill looking at high cattle prices.
(03:26):
Yes.
And, and they're gonna stayhigh for a while because
expansion hasn't hit yet, so.
That was, that was kind of aninteresting, uh, point I think.
Um, the other interesting point thatshowed up this month, which we didn't
really highlight in the report itself,but it's worth maybe talking about
it, and that is when we look aheadto next year, what are your biggest
concerns for your farming operation?
(03:47):
And there was no change in theranking of what people chose.
High input cost has been the top concernever since we started asking this question
now for the last, what couple of years.
But there was a jump in terms of morepeople were worried about high input cost.
45% of the respondents, I think,said that that was their top concern.
(04:08):
There's been a lot of press it, and Idon't know if this impacts people or
not, but there's been a lot of pressthat that's been talking about the
tariffs and inflation and affordability.
Maybe some of that, uh, you know, maybethey're factoring in some of that.
Uh, one of the, one of the, uh, wetold, we were talking before the, the
podcast, one of the inputs that hasincreased, uh, you know, compared,
(04:29):
you know, recently is, is fertilizer.
Uh, you, you were, you were talkingspecifically phosphorus, and so, you
know, maybe that, maybe that's it.
And so I, it's probably a combinationof, of, of those two things, you know,
may maybe some more concerns aboutinflation, uh, general inflation,
which certainly would, uh, increasesome of the, uh, production costs in
agriculture and maybe some of these,uh, relatively higher fertilizer, uh,
(04:51):
prices are entering into their thinking.
Yeah.
The other thing that took place,especially since our last survey is
there's been some press reports kindof highlighting the high input cost.
Yeah.
And basically trying to call outsome suppliers for raising prices.
Yeah.
And so maybe it's kind of highlightedthe issue in producer's minds
maybe a little more than otherwise.
And of course, the other thingtakes place this time of year is.
(05:12):
People are purchasing inputs forthe upcoming year, and so it's kind
of the reminder of just how much,
Yes.
things like fertilizer, seed,uh, and other inputs cost.
So the Farm Financial PerformanceIndex rose two points in
December to a rating of 94.
That index is upsubstantially since October.
You know, if you look at it comparedto October, we're up 16 points.
(05:35):
That's still lower thanit was back in May.
I think that leaves us 15 pointslower than in May, but it's been a
pretty significant jump since October.
And soybean prices has been alittle, little softer recently, but
they're, they're still up comparedto what they were mid-October.
And, and I, I point to that, uh, as, asbeing a very positive force, uh, when you
look at this financial performance index.
(05:55):
Of course, when, uh, when, when soybeanprices increase, it also tended to
raise, uh, corn prices a little bit too.
And so I, I really point to thosethat, that, that, that news, uh, uh,
with respect to China, uh, you tradewith China, uh, in late October is,
is really being responsible for this.
That's an interesting point and I,I tend to agree with it, although
by the time we did the Decembersurvey, we'd lost some of that.
(06:17):
Yeah.
We lost some, we lost some headways.
You know, looking at, uh, forexample, here in the Eastern Corn
Belt, cash prices for soybeansdropping back below $11, right?
Yeah.
Yeah.
So, uh, good, good point though.
Farm Capital Investment Index,like the performance index, up two
points this time to a reading of 58.
And although that index is up,we still had 60% of the response
(06:39):
to the survey saying it's a badtime to make a large investments.
Yes.
Um, what's your take?
It's, it's been sideways for a long time.
I, I, I've been talking about thelast couple months and so, and so I,
I, I don't really think it's reallymoving one direction or the other.
Uh, it is just kind of,it is just kind of stable.
Yeah.
And if you look at the next one, which isplans for, um, farm machinery purchases.
(07:02):
The, there's no evidence, noof any confidence rise there.
In fact, uh, the percentages saidthey were gonna, uh, reduce their
machine repurchases compared to a yearago actually went up a little bit.
This, this month it went from 51% to 55%.
No change virtually in the percentage ofpeople who said that it's a good time.
I think it went from seven to 6%.
Yeah.
So we're not, if even though theindex went up a little, I don't think
(07:24):
we're gonna see any rush to the, tothe doors of the machine dealers.
And I, I wanna circle back to,to a question we had last month.
And we asked question, we askeda question about what would you
do with your MFP trade payment.
I mean, it looks like thoseare gonna materialize now.
Uh, what would you do with that?
I think 10% said theywould invest in machinery.
So very small percent.
It's not zero.
Uh, as I was talking to someone inthe machinery industry, uh, noted,
(07:47):
you know, it's not zero, uh, butit's still a really small percentage.
Yeah.
And I think that that just reflects howtight margins still are, uh, even with
the potential of these payments marginsare, are, are tight enough that, that
some people are gonna have a littlebit of trouble repaying debt, uh, yet
alone buying new buying machinery.
Yeah, and you're right, we askedthat question a couple of times
and the, the responses rangebetween I think 10 and 12%.
(08:09):
Yeah.
They were very small.
Yeah.
So, uh, you know, if you look at thenext one, which is the Short-Term
Farmland Index, um, 117, up just onepoints compared to a month earlier.
But maybe the bigger news is ifyou go back to September we were at
106, so we're now 11 points higherthan we were early in the fall.
Basically the beginning of harvest time.
(08:30):
Are you surprised at the strengthin that short-term farmland index?
Yes, I'm surprised in both theshort-term index, uh, being relatively
strong as well as the long-termindex, uh, being relatively strong.
I think the long run index was eitherclose or at, uh, it's, it's all time high.
Uh, and, and so, and so, it'sa little surprising to me.
Uh, uh, that's really good newsfrom a balance sheet standpoint.
(08:53):
Uh, 'cause obviously if land valueshold that, that means the balance
sheet's gonna be much stronger.
And we did ask a question thismonth, uh, related to the, uh,
the strength of the balance sheet.
And, uh, 68%, uh, said that theirbalance, uh, agreed or, or strongly agreed
that their balance sheet was strong.
Uh, and, and so certainlythis is good news for farmers.
But it, uh, it, it is a little surprisingto me that it's as strong as it is 'cause
(09:17):
you look at the fundamentals, uh, youknow, net income is, is not that strong.
Uh, and also the interest rateI would think is more neutral.
Uh, but one of the, I I was looking atsome of the, some of the factors, uh,
that they said were impacting land valuesand, uh, and inflation has, has gotten a
little bit, uh, more common as a response,uh, is, is, uh, related to land values.
(09:39):
And so maybe that's part of it.
I mean the, the stockmarket's pretty high.
Uh, I think that's also could be related alittle bit to inflation, and maybe that's
holding up these land values a littlehigher than they would be otherwise.
You know, we, we talked, I think lastmonth about the fact that you've done
a lot of research on farmland valuesand factors that influence it and what
kind of a hedge it is against inflation.
And one of the things I think you liketo point out is that when there's a
(10:00):
lot of uncertainty, people like tomove money into hard assets and gold,
silver's at an all time high, uh,
And land would be consistent.
and farmland would be right in there.
So I, that's probably a factor as well.
Yeah.
If you look underneath the,uh, index and look at the raw
responses to that farmland, uh,question, it's kind of interesting.
The change in the index this month wasnot driven by more people saying they
(10:24):
think farmland better is gonna go up.
It was driven by fewer people sayingfarmland values were gonna decline.
And so.
That's kind of a muted form of optimism,I guess is how I'd characterize that,
as opposed to being very bullishabout, uh, what's taken place.
But that percentage that said decline is,is about the lowest it's been since '23.
Yeah.
So that was interesting.
Yeah.
And then as you mentioned, uh,the long term index record high.
(10:47):
Yeah.
Uh, 166, only one point changefrom last month, but you know,
prior to that it was at 161.
And a little bit like some ofthe other indices, you go back
to early fall, now it's upsubstantially compared to early fall.
It's, I think back in, uh,late, late summer, early
fall, we were down about 146.
So we're up 20 points compared to that.
That's the five year outlook.
(11:08):
Um, again, you just think it'sthe, the inflation aspect and the,
and the hedge against inflation.
It, it has to, that hasto be a major factor.
Um, all right, so,
Next one was, uh, over the nextfive years, do you think ag exports
are more likely to increase,decrease, or remain about the same?
And you know, if there's any news onthis one, it's the fact that we've
(11:31):
got fewer and fewer people telling usthey think exports are gonna decline.
At least when we ask the questionin a generic framework, right?
We just say ag exports.
Two months ago, 14% of thepeople in the survey said it was
gonna, they thought it was gonnadecline over the next five years.
Last month that was cut in half to 7%.
This month it went down slightly to 5%.
(11:51):
Um, that's the big picture.
Right?
And then when we asked a littlemore specifically about, you know,
soybeans, which was the hot news withrespect to the trade agreement with
China, we got a different response.
13% of the people in the survey saidthat they think soybean exports over
the next five years could decline.
(12:14):
Interesting contrast there in termsof how we phrase the questions.
What do you make of that?
Yeah.
Very interesting.
And we phrase this question over fiveyears because, uh, uh, just just to
remind the, the listener that thefirst year is supposed to be lower.
Uh, the, the, the purchases from Chinaare supposed to be lower, and then
they're supposed to be bumped up inthe, in the second and third year.
And the levels in the secondand third year are similar.
(12:36):
They're down a little bit, uh, fromthe historical average, but they're
similar to the long run average.
And so I found this really interestingthat, you know, even with those, even
with the, I'm not gonna say agreement,but even with that discussion that we had,
uh, with China, there's still, there'sstill 13%, think, they're think we're
gonna, the exports are gonna decline.
Well, maybe the next question helpsexplain that because the next question
(12:56):
we asked was, how concerned are youabout the competitiveness of U.S.
soybean exports with Brazil's exports?
And when you add 'em together,I think 84% of the people in the
survey said they were concerned aboutour competitiveness with Brazil.
And maybe more importantly.
45% said they were very concerned.
(13:17):
Yeah.
I'm so glad we asked this questionbecause we didn't really know, and we
talked about this, we talked about thisissue when we were drafting the survey.
Uh, we didn't really know what thiswas gonna look like and, and, you know,
anecdotal evidence, you know, talkingto the farm press, you know, reading,
reading articles in the farm press.
And then I, I've done a, I've donea couple, uh, meetings recently.
There's some angst out there, uh,about, about, uh, our competitiveness,
(13:41):
uh, vis-a-vis, uh, Brazil.
Uh, and, and so, and, and so this,these results are showing that.
And I think with good reason, right?
Yes.
You know, when, uh, you and I makepresentations around the country, you
know, one of the charts I use anywayis I show how Brazil, South America in
general, but Brazil in particularly,has gained market share, not just
(14:02):
over a couple of years, over decades.
Right.
And so it's clear that they've been along run competitor for a long time.
And of course it eclipsed us in terms ofboth production and, and world exports.
So, yeah.
Um, it's, it's a serious concern.
And one of the things I pointout is, is they become, they,
they, they, they, they increasecompetitiveness every single year.
(14:22):
But if you go back to the la la, the,the, uh, last time we had a trade
dispute with China back in 2008,they're certainly more competitive,
uh, you know, compared to 2018.
Uh, they've increased production and theyhave the capacity to, to export a lot
more soybeans than they did back in 2018.
And so it makes, it makes me moreconcerned, uh, when we have these
(14:42):
disputes with China because, uh,you know, China doesn't need us.
As much as they, as they did in the past.
Yeah, that's a good point.
Yeah.
When you look at those charts,and I always put a long run chart
up when I make a presentation.
There was a time when anywhere in theworld if you wanted to import soybeans,
there was really only one supplier.
Yes.
And that was the us.
That's not been the case for a longtime and it's been eroding for decades.
(15:05):
So, um, as we look at.
The next one, which is a question we'vebeen asking since, uh, springtime, I
think we started doing this in April.
Do you expect the increased use of tariffsby the U.S. to strengthen or weaken
the U.S. ag economy in the long run?
And in the beginning, strength,strengthen the economy was clear
(15:26):
that the dominant response.
First couple times we asked this inApril and May, 70% said strengthen.
That support for the tariffpolicy has been eroding.
It's still a majority, 54%said strengthen this month.
Um, that's the second lowest percentagewe've gotten on strengthen since
we've been asking the question.
(15:46):
And maybe more importantly,and we showed up, we talked
about this last month as well.
We're picking up more peoplesaying they're just uncertain.
This month it was 19% of the people inthe survey said they were uncertain.
Last month it was 17%.
The month before that it was 16.
You go back to lastspring and it was only 8%.
Yeah.
That's a huge signal, uh,that they're, people are just
getting, becoming more concerned.
(16:08):
Yeah.
So, clearly a shift.
Not to the point where we have amajority saying they think it's gonna
hurt us, but we're getting closer.
Uh, and then the question we startedasking this summer, which was, would
you say that things in the U.S. todayare generally headed in the right
direction or on the wrong track?
We got one of the most positiveresponses we've gotten since
we started asking this in July.
(16:28):
75%, three fourths of thepeople in the survey said we're
headed in the right direction.
25% said wrong track.
Um, last month it was 67% saying rightdirection and 33% saying wrong track.
I, I'm glad we includedboth of these questions.
The, you know, the first question,uh, focuses more on, on tariff policy.
(16:50):
This is a more general question and,and there has been some very positive
things from a policy standpoint thatthat have happened, uh, in the last year.
The one big, beautiful bill, uh,certainly when you look at, uh, you know,
look at, uh, the ability to, to to useSection 179, bonus depreciation and some
other tax issues we're very positive.
(17:11):
Uh, you know, for agriculture itlooks like we're can get these trade
payments and that's also very positive.
And so, and so, I'm not particularlysurprised that they, they
answer this or, uh, stronger.
They're, they're, they're stronger,uh, in terms of ask, asking this
question, the in affirmativecompared to the tariff question.
Yeah, that's a good point.
The other thing is, I always tell people,I think this question encompasses more
(17:32):
than what's going on in agriculture.
Oh, yeah.
Um, so, you know, it's, it's, you caninterpret it, it's an open-ended question.
You can interpret this the way youwant to, uh, but I strongly suspect it
embodies much more than just agriculture.
Uh, so that wraps up thehighlights for this month's survey.
You can get the full report on ourwebsite, which is purdue.edu/agbarometer.
(17:55):
And if you're listening tothis on the web, you, I'd
encourage you to think about.
Um, subscribing to our podcast,which is Purdue Commercial
AgCast, which is available atall the major podcast providers.
And of course you can listen to it onthe web itself without subscribing.
And that website ispurdue.edu/commercialag.
So on behalf of my colleague, Dr.Michael Langemeier and the Center
for Commercial Agriculture, Iwanna thank you for joining us.
(18:17):
And I'm James Mintert.
Welcome to Purdue Commercial AgCast, thePurdue University Center for Commercial
Agriculture's podcast featuring farmmanagement news and information.
I'm your host, James Mintert,Emeritus Professor of Ag Economics
here at Purdue University.
And joining me today is my colleague,Dr. Michael Langemeier, who's
the director of the Center forCommercial Agriculture and also a
professor of ag economics at Purdue.
We're gonna review the results fromthe December 2025 Purdue University-CME
(00:29):
Group Ag Economy Barometer surveyof farmers from across the nation.
Each month we survey 400 farmersacross the U.S. to learn more about
their perspectives on the ag economy.
This month's ag barometer surveywas conducted from the first
through the 5th of December.
And you know, Michael, as you look at it.
The barometer fell threepoints this month to 136.
(00:50):
That's about the same as this time lastyear, but it does leave the index 22
points lower than it was back in May,which was the index as high point in 2025.
And you know, if you look at what wasgoing on in terms of what drove the
change, Current Condition Index at128 was unchanged from a month ago.
That left the Current Condition Index,at year end, about 18 points below its
(01:13):
2025 peak, which was also back in May.
Future expectations did drop, and that'swhat drove the change in the barometer.
It was down four points to a reading of140, that leaves that index down 24 points
from its 2025 peak, which was also in May.
So I guess two questions,Michael, were you surprised
at the drop in the barometer?
And more importantly, maybe were yousurprised at the fact that the motivator
(01:37):
was the future expectations change?
It, it, it's always hard to tell exactlywhat, what's gonna happen here and, and
in a kind of a short month, if you will.
I mean, there wasn't as much time betweenthe surveys as there typically is.
I think there was only threeweeks, uh, rather than four weeks.
And I don't know ifthat factored in or not.
But, but there really, there reallyhasn't been a lot of news or a lot of
changes, uh, you know, changes in policy.
(02:00):
You know, that, that have came about.
And so it wasn't real surprising thatit, that it was relatively stable.
Uh, you know, I thought maybe there'dbe a little bit of strengthening in
the current rather than the future.
And so that's kind of theway I, I looked at that.
I, I don't think the long run policyenvironments necessarily changed, uh,
in the last month, but, uh, that'sjust kinda my viewpoint on that.
(02:20):
Yeah, I was a little surprised atthe drop in the future expectations.
Uh, I was kind of looking for achange in the Current Condition Index.
Yes.
But I, you know, I don'twanna overplay that 'cause of
the, the changes were small.
They're small.
Yeah.
So one of the things that was kind ofinteresting is the fact that if you look
at the report and, and look at the surveyitself, when we ask people about over
(02:43):
the next five years are widespread goodtimes of expected in crops or livestock.
The drop was in livestock, right?
I mean that was, that was, uh,I dunno if it's not unexpected,
but it was an eight point drop.
It went from 49% saying good,uh, good times to 41%, almost
no change in the crop side.
(03:04):
Two points.
And it's remarkable that that drop is like30 points, uh, in the last two months.
And so that, that's a bigdifferent, that's a big
change in the last two months.
And most of that I thinkis coming outta cattle.
Yes.
Right.
And, uh, people all of a suddenare less confident about what's
going on in, in the cattle sector.
They were really, really positivefor a long time there, but all of
a sudden, and, and you know, we'restill looking at high cattle prices.
(03:26):
Yes.
And, and they're gonna stayhigh for a while because
expansion hasn't hit yet, so.
That was, that was kind of aninteresting, uh, point I think.
Um, the other interesting point thatshowed up this month, which we didn't
really highlight in the report itself,but it's worth maybe talking about
it, and that is when we look aheadto next year, what are your biggest
concerns for your farming operation?
(03:47):
And there was no change in theranking of what people chose.
High input cost has been the top concernever since we started asking this question
now for the last, what couple of years.
But there was a jump in terms of morepeople were worried about high input cost.
45% of the respondents, I think,said that that was their top concern.
(04:08):
There's been a lot of press it, and Idon't know if this impacts people or
not, but there's been a lot of pressthat that's been talking about the
tariffs and inflation and affordability.
Maybe some of that, uh, you know, maybethey're factoring in some of that.
Uh, one of the, one of the, uh, wetold, we were talking before the, the
podcast, one of the inputs that hasincreased, uh, you know, compared,
(04:29):
you know, recently is, is fertilizer.
Uh, you, you were, you were talkingspecifically phosphorus, and so, you
know, maybe that, maybe that's it.
And so I, it's probably a combinationof, of, of those two things, you know,
may maybe some more concerns aboutinflation, uh, general inflation,
which certainly would, uh, increasesome of the, uh, production costs in
agriculture and maybe some of these,uh, relatively higher fertilizer, uh,
(04:51):
prices are entering into their thinking.
Yeah.
The other thing that took place,especially since our last survey is
there's been some press reports kindof highlighting the high input cost.
Yeah.
And basically trying to call outsome suppliers for raising prices.
Yeah.
And so maybe it's kind of highlightedthe issue in producer's minds
maybe a little more than otherwise.
And of course, the other thingtakes place this time of year is.
(05:12):
People are purchasing inputs forthe upcoming year, and so it's kind
of the reminder of just how much,
Yes.
things like fertilizer, seed,uh, and other inputs cost.
So the Farm Financial PerformanceIndex rose two points in
December to a rating of 94.
That index is upsubstantially since October.
You know, if you look at it comparedto October, we're up 16 points.
(05:35):
That's still lower thanit was back in May.
I think that leaves us 15 pointslower than in May, but it's been a
pretty significant jump since October.
And soybean prices has been alittle, little softer recently, but
they're, they're still up comparedto what they were mid-October.
And, and I, I point to that, uh, as, asbeing a very positive force, uh, when you
look at this financial performance index.
(05:55):
Of course, when, uh, when, when soybeanprices increase, it also tended to
raise, uh, corn prices a little bit too.
And so I, I really point to thosethat, that, that, that news, uh, uh,
with respect to China, uh, you tradewith China, uh, in late October is,
is really being responsible for this.
That's an interesting point and I,I tend to agree with it, although
by the time we did the Decembersurvey, we'd lost some of that.
(06:17):
Yeah.
We lost some, we lost some headways.
You know, looking at, uh, forexample, here in the Eastern Corn
Belt, cash prices for soybeansdropping back below $11, right?
Yeah.
Yeah.
So, uh, good, good point though.
Farm Capital Investment Index,like the performance index, up two
points this time to a reading of 58.
And although that index is up,we still had 60% of the response
(06:39):
to the survey saying it's a badtime to make a large investments.
Yes.
Um, what's your take?
It's, it's been sideways for a long time.
I, I, I've been talking about thelast couple months and so, and so I,
I, I don't really think it's reallymoving one direction or the other.
Uh, it is just kind of,it is just kind of stable.
Yeah.
And if you look at the next one, which isplans for, um, farm machinery purchases.
(07:02):
The, there's no evidence, noof any confidence rise there.
In fact, uh, the percentages saidthey were gonna, uh, reduce their
machine repurchases compared to a yearago actually went up a little bit.
This, this month it went from 51% to 55%.
No change virtually in the percentage ofpeople who said that it's a good time.
I think it went from seven to 6%.
Yeah.
So we're not, if even though theindex went up a little, I don't think
(07:24):
we're gonna see any rush to the, tothe doors of the machine dealers.
And I, I wanna circle back to,to a question we had last month.
And we asked question, we askeda question about what would you
do with your MFP trade payment.
I mean, it looks like thoseare gonna materialize now.
Uh, what would you do with that?
I think 10% said theywould invest in machinery.
So very small percent.
It's not zero.
Uh, as I was talking to someone inthe machinery industry, uh, noted,
(07:47):
you know, it's not zero, uh, butit's still a really small percentage.
Yeah.
And I think that that just reflects howtight margins still are, uh, even with
the potential of these payments marginsare, are, are tight enough that, that
some people are gonna have a littlebit of trouble repaying debt, uh, yet
alone buying new buying machinery.
Yeah, and you're right, we askedthat question a couple of times
and the, the responses rangebetween I think 10 and 12%.
(08:09):
Yeah.
They were very small.
Yeah.
So, uh, you know, if you look at thenext one, which is the Short-Term
Farmland Index, um, 117, up just onepoints compared to a month earlier.
But maybe the bigger news is ifyou go back to September we were at
106, so we're now 11 points higherthan we were early in the fall.
Basically the beginning of harvest time.
(08:30):
Are you surprised at the strengthin that short-term farmland index?
Yes, I'm surprised in both theshort-term index, uh, being relatively
strong as well as the long-termindex, uh, being relatively strong.
I think the long run index was eitherclose or at, uh, it's, it's all time high.
Uh, and, and so, and so, it'sa little surprising to me.
Uh, uh, that's really good newsfrom a balance sheet standpoint.
(08:53):
Uh, 'cause obviously if land valueshold that, that means the balance
sheet's gonna be much stronger.
And we did ask a question thismonth, uh, related to the, uh,
the strength of the balance sheet.
And, uh, 68%, uh, said that theirbalance, uh, agreed or, or strongly agreed
that their balance sheet was strong.
Uh, and, and so certainlythis is good news for farmers.
But it, uh, it, it is a little surprisingto me that it's as strong as it is 'cause
(09:17):
you look at the fundamentals, uh, youknow, net income is, is not that strong.
Uh, and also the interest rateI would think is more neutral.
Uh, but one of the, I I was looking atsome of the, some of the factors, uh,
that they said were impacting land valuesand, uh, and inflation has, has gotten a
little bit, uh, more common as a response,uh, is, is, uh, related to land values.
(09:39):
And so maybe that's part of it.
I mean the, the stockmarket's pretty high.
Uh, I think that's also could be related alittle bit to inflation, and maybe that's
holding up these land values a littlehigher than they would be otherwise.
You know, we, we talked, I think lastmonth about the fact that you've done
a lot of research on farmland valuesand factors that influence it and what
kind of a hedge it is against inflation.
And one of the things I think you liketo point out is that when there's a
(10:00):
lot of uncertainty, people like tomove money into hard assets and gold,
silver's at an all time high, uh,
And land would be consistent.
and farmland would be right in there.
So I, that's probably a factor as well.
Yeah.
If you look underneath the,uh, index and look at the raw
responses to that farmland, uh,question, it's kind of interesting.
The change in the index this month wasnot driven by more people saying they
(10:24):
think farmland better is gonna go up.
It was driven by fewer people sayingfarmland values were gonna decline.
And so.
That's kind of a muted form of optimism,I guess is how I'd characterize that,
as opposed to being very bullishabout, uh, what's taken place.
But that percentage that said decline is,is about the lowest it's been since '23.
Yeah.
So that was interesting.
Yeah.
And then as you mentioned, uh,the long term index record high.
(10:47):
Yeah.
Uh, 166, only one point changefrom last month, but you know,
prior to that it was at 161.
And a little bit like some ofthe other indices, you go back
to early fall, now it's upsubstantially compared to early fall.
It's, I think back in, uh,late, late summer, early
fall, we were down about 146.
So we're up 20 points compared to that.
That's the five year outlook.
(11:08):
Um, again, you just think it'sthe, the inflation aspect and the,
and the hedge against inflation.
It, it has to, that hasto be a major factor.
Um, all right, so,
Next one was, uh, over the nextfive years, do you think ag exports
are more likely to increase,decrease, or remain about the same?
And you know, if there's any news onthis one, it's the fact that we've
(11:31):
got fewer and fewer people telling usthey think exports are gonna decline.
At least when we ask the questionin a generic framework, right?
We just say ag exports.
Two months ago, 14% of thepeople in the survey said it was
gonna, they thought it was gonnadecline over the next five years.
Last month that was cut in half to 7%.
This month it went down slightly to 5%.
(11:51):
Um, that's the big picture.
Right?
And then when we asked a littlemore specifically about, you know,
soybeans, which was the hot news withrespect to the trade agreement with
China, we got a different response.
13% of the people in the survey saidthat they think soybean exports over
the next five years could decline.
(12:14):
Interesting contrast there in termsof how we phrase the questions.
What do you make of that?
Yeah.
Very interesting.
And we phrase this question over fiveyears because, uh, uh, just just to
remind the, the listener that thefirst year is supposed to be lower.
Uh, the, the, the purchases from Chinaare supposed to be lower, and then
they're supposed to be bumped up inthe, in the second and third year.
And the levels in the secondand third year are similar.
(12:36):
They're down a little bit, uh, fromthe historical average, but they're
similar to the long run average.
And so I found this really interestingthat, you know, even with those, even
with the, I'm not gonna say agreement,but even with that discussion that we had,
uh, with China, there's still, there'sstill 13%, think, they're think we're
gonna, the exports are gonna decline.
Well, maybe the next question helpsexplain that because the next question
(12:56):
we asked was, how concerned are youabout the competitiveness of U.S.
soybean exports with Brazil's exports?
And when you add 'em together,I think 84% of the people in the
survey said they were concerned aboutour competitiveness with Brazil.
And maybe more importantly.
45% said they were very concerned.
(13:17):
Yeah.
I'm so glad we asked this questionbecause we didn't really know, and we
talked about this, we talked about thisissue when we were drafting the survey.
Uh, we didn't really know what thiswas gonna look like and, and, you know,
anecdotal evidence, you know, talkingto the farm press, you know, reading,
reading articles in the farm press.
And then I, I've done a, I've donea couple, uh, meetings recently.
There's some angst out there, uh,about, about, uh, our competitiveness,
(13:41):
uh, vis-a-vis, uh, Brazil.
Uh, and, and so, and, and so this,these results are showing that.
And I think with good reason, right?
Yes.
You know, when, uh, you and I makepresentations around the country, you
know, one of the charts I use anywayis I show how Brazil, South America in
general, but Brazil in particularly,has gained market share, not just
(14:02):
over a couple of years, over decades.
Right.
And so it's clear that they've been along run competitor for a long time.
And of course it eclipsed us in terms ofboth production and, and world exports.
So, yeah.
Um, it's, it's a serious concern.
And one of the things I pointout is, is they become, they,
they, they, they, they increasecompetitiveness every single year.
(14:22):
But if you go back to the la la, the,the, uh, last time we had a trade
dispute with China back in 2008,they're certainly more competitive,
uh, you know, compared to 2018.
Uh, they've increased production and theyhave the capacity to, to export a lot
more soybeans than they did back in 2018.
And so it makes, it makes me moreconcerned, uh, when we have these
(14:42):
disputes with China because, uh,you know, China doesn't need us.
As much as they, as they did in the past.
Yeah, that's a good point.
Yeah.
When you look at those charts,and I always put a long run chart
up when I make a presentation.
There was a time when anywhere in theworld if you wanted to import soybeans,
there was really only one supplier.
Yes.
And that was the us.
That's not been the case for a longtime and it's been eroding for decades.
(15:05):
So, um, as we look at.
The next one, which is a question we'vebeen asking since, uh, springtime, I
think we started doing this in April.
Do you expect the increased use of tariffsby the U.S. to strengthen or weaken
the U.S. ag economy in the long run?
And in the beginning, strength,strengthen the economy was clear
(15:26):
that the dominant response.
First couple times we asked this inApril and May, 70% said strengthen.
That support for the tariffpolicy has been eroding.
It's still a majority, 54%said strengthen this month.
Um, that's the second lowest percentagewe've gotten on strengthen since
we've been asking the question.
(15:46):
And maybe more importantly,and we showed up, we talked
about this last month as well.
We're picking up more peoplesaying they're just uncertain.
This month it was 19% of the people inthe survey said they were uncertain.
Last month it was 17%.
The month before that it was 16.
You go back to lastspring and it was only 8%.
Yeah.
That's a huge signal, uh,that they're, people are just
getting, becoming more concerned.
(16:08):
Yeah.
So, clearly a shift.
Not to the point where we have amajority saying they think it's gonna
hurt us, but we're getting closer.
Uh, and then the question we startedasking this summer, which was, would
you say that things in the U.S. todayare generally headed in the right
direction or on the wrong track?
We got one of the most positiveresponses we've gotten since
we started asking this in July.
(16:28):
75%, three fourths of thepeople in the survey said we're
headed in the right direction.
25% said wrong track.
Um, last month it was 67% saying rightdirection and 33% saying wrong track.
I, I'm glad we includedboth of these questions.
The, you know, the first question,uh, focuses more on, on tariff policy.
(16:50):
This is a more general question and,and there has been some very positive
things from a policy standpoint thatthat have happened, uh, in the last year.
The one big, beautiful bill, uh,certainly when you look at, uh, you know,
look at, uh, the ability to, to to useSection 179, bonus depreciation and some
other tax issues we're very positive.
(17:11):
Uh, you know, for agriculture itlooks like we're can get these trade
payments and that's also very positive.
And so, and so, I'm not particularlysurprised that they, they
answer this or, uh, stronger.
They're, they're, they're stronger,uh, in terms of ask, asking this
question, the in affirmativecompared to the tariff question.
Yeah, that's a good point.
The other thing is, I always tell people,I think this question encompasses more
(17:32):
than what's going on in agriculture.
Oh, yeah.
Um, so, you know, it's, it's, you caninterpret it, it's an open-ended question.
You can interpret this the way youwant to, uh, but I strongly suspect it
embodies much more than just agriculture.
Uh, so that wraps up thehighlights for this month's survey.
You can get the full report on ourwebsite, which is purdue.edu/agbarometer.
(17:55):
And if you're listening tothis on the web, you, I'd
encourage you to think about.
Um, subscribing to our podcast,which is Purdue Commercial
AgCast, which is available atall the major podcast providers.
And of course you can listen to it onthe web itself without subscribing.
And that website ispurdue.edu/commercialag.
So on behalf of my colleague, Dr.Michael Langemeier and the Center
for Commercial Agriculture, Iwanna thank you for joining us.
(18:17):
And I'm James Mintert.
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