In this episode of the Purdue Commercial AgCast, Joana Colussi and Michael Langemeier break down results from the February 2026 Purdue University–CME Group Ag Economy Barometer.
The overall barometer rose modestly to 116, driven by improved current conditions. However, the Index of Future Expectations slipped, reflecting continued caution among producers. Crop producers remain under financial pressure, while livestock producers—especially cattle operations—report stronger optimism.
In this episode, we discuss:
-
Why 63% of producers expect bad financial times ahead for crops
-
Continued strength in cattle and livestock sentiment
-
Why nearly 70% say it’s a bad time to invest in machinery
-
How producers plan to use Farmer Bridge Assistance Payments
-
Rising importance of trade policy in farm decision-making
-
Farmland value expectations and what they signal for balance sheets
-
Farm growth, consolidation, and generational transition trends
What do these shifts in sentiment mean for 2026 decision-making?
Listen in for insights and implications for commercial farms.
Full Ag Economy Barometer report: 👉 https://purdue.ag/agbarometer
The Ag Economy Barometer sentiment index is calculated each month from 400 U.S. agricultural producers’ responses to a telephone survey.
For more farm management content, visit: 👉 https://purdue.ag/commercialag
Subscribe to the podcast: 👉 https://purdue.ag/agcast
Follow us X: https://twitter.com/PUCommercialAg Facebook: https://www.facebook.com/PUCommercialAg LinkedIn: https://www.linkedin.com/company/center-for-commercial-agriculture
#Purdue #AgBarometer #FarmManagement #FarmEconomy #AgOutlook #AgEconomy #Agriculture
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Episode Transcript
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(00:00):
Welcome to Purdue Commercial AgCast.
I am Joanna Colussi, aResearch Assistant Professor in
Agricultural Economics at Purdue.
I joined the University lastfall and I'm super excited to
step into this role this month.
I will be joining my colleague,someone you know very well,
Michael Langemeier, Director of theCenter for Commercial Agriculture.
(00:22):
Today we will discuss the results fromthe February 2026, Purdue University
-CME Group Ag Economy Barometer survey.
Each month we interview 400 farmers acrossthe United States to learn more about
their perspectives on the ag economy.
This month's ag barometer surveywas conducted from the second
(00:45):
through the 6th of February.
Before we get started, be sure to followthe page, like this video, and subscribe
so you don't miss future updates.
So let's take a look at the thismonth's Ag Economy Barometer.
(01:07):
The overall index increased abit from 113 points in January,
to 116 points in February.
It's not a huge jump, but one improvement.
Even so we were still well belowwhere we were a year ago - 36 points
lower than last February - andabout 20 points below December.
(01:31):
When you break it apart,it gets interesting.
The Index of Current Conditionsactually improved quite a
bit, up 11 points this month.
So, producers are feeling somewhat betterabout where things stand right now.
But the Index of Future Expectationsis slipped by one point.
(01:53):
So even though current conditionshave improved, there is still a
lot of caution about what's ahead.
Michael, what do you think is drivingthat mix of better current sentiment,
but continue concern about the future?
Well, the current sentiment isreally driven on what's going
on in the ground right now.
And so if you look at net returnsfor crops, they're relatively low.
(02:16):
Livestock net returns are better.
And so if you put those two togetherthat's keeping the current condition index
lower than what it would be otherwise andlower than what it was for most of 2025.
One of the things that's reallydisconcerting to me is how low the Index
of Future Expectations has really gotten.
The current index is the lowestindex since September 2024.
(02:38):
Before election.
Before the election.
And so I think what's going onis, is that the relatively tough
environment we're facing, today, isexpected to continue, into the future.
A couple of the questions that, that gointo the Index of Future Expectations
are worded as, Do you expect to havegood times or bad times, financially
fi in in the next five years?
(02:59):
And so, and so, that's whyI say that's disconcerting.
'Cause it really, it really tells methat the crop producers are expecting
at least two or three more tough years.
And, and that's, that's beingreflected in that relatively low
Index of Future Expectations.
Two related questions askrespondents whether they expect
crop producers or livestockproducers to have good or bad time.
(03:22):
And we continue to see moreoptimism on the livestock side
compared to the crop production.
Michael, as you look ahead, what kindof trend should we expect this year,
given the current situation relatedto the cattle prices, for example?
I think the disparity between, thesentiment between the crop producers
and, and the livestock producers or cropproduction and livestock production is
(03:46):
gonna continue for at least the nextyear, possibly the next two years.
And, and what we're seeing here is,is, like I said, we're seeing some
low net returns in, in the cropsector, really across the board.
Corn, soybean, wheat, and cotton.
That's the primary commodities thatproducers have, that, that we survey,
whereas the, the, the cattle, the cattlegroup is about 20% of all respondents.
(04:08):
And so it's a very important part of thelivestock group that we survey, but also a
very important part of the survey itself.
And, and cattle prices areexpected to remain relatively
high for the foreseeable future.
Just to put this in perspective, youknow, this month in February here,
63% expected crop producers to havebad times in the next five years.
(04:29):
Only 17 percent expected livestockproducers to have bad times.
And so just a very large difference.
And and I think this is gonna continue.
And you can see in the consumerperspective, you see the price
of the meat on the grocery store.
Yeah.
It's continue high.
Meat prices are highand, and demand is high.
Yeah.
And so that just, that's just aperfect storm for, for them to, to
(04:49):
remain having solid net returns,particularly in the cow sector.
That's true.
So let's turn to the FarmCapital Investment Index.
That measure moved up three pointsthis month, reaching 50 points.
Even so, producers remaincautions about large investments.
Around 70% of the respondents saidthat they, they believed now it's a
(05:12):
bad time to buy machinery or buildings.
The results from another questionhelp explain discussions, mood.
We ask at producers.
Looking ahead to the next year,what's your biggest concern
for your farming operation?
The two biggest concerns were highinput costs and low output, prices.
(05:33):
These concerns contribute tothe stress, the financial stress
that you just mentioned regardingthe current net returns and the
agriculture economy as a whole.
Michael, do you see anychange of improvement of these
concerns in the short term?
If you look at the current conditionschart each month, it looks about
the same, after COVID till today.
(05:54):
It really does look the same.
About 45% are very concerned aboutinput costs and anywhere from 25 to
30% are concerned about low prices.
And again, this is primarily coming from,from the crop producers, which represent
about 70% of those that, that we survey.
And so I don't think this isgonna change, anytime soon.
I think those are gonna continue,to be the largest concerns.
(06:17):
And as long as we haverelatively tight net returns.
That, that capital investment indexis, is not going to skyrocket.
In fact, it's been in a very tightband for the last 12 to 18 months.
It's been ranging from approximately50 to 60 for the last 12 to 18 months.
Obviously well below a hundred.
If the index is above a hundred, thatmeans that people are, are, think,
(06:39):
think this is a good time to investin machinery rather than a bad time.
So obviously there's a lot ofpeople that think this is a bad
time, to invest in machinery.
In fact, one of the questions we ask.
Is is you expect to increaseor decrease or remain the same.
The amount of purchases of machinery,only 7% said they were going to increase
the purchase of machinery in 2026.
(07:02):
Extremely low number.
Yeah.
And given the situation'stotally understandable.
Yes it is.
Yeah.
Yeah.
So, turning to the exports, we also ask atfarmers if over the next five years they
expect agriculture exports to increase,decrease or remain about the same.
Compared to the last month,there was a small change.
(07:22):
So even after last year's decliningexports, particularly in soybeans
to China, producers still appearoptimist about the long-term
outlook for international markets.
What could explain this optimist,Michael, in your opinion?
I think it goes, it goes to what I callthe long run policy environment, and
(07:43):
ever since the 2024 election there'sbeen more positivity, towards the,
the long run policy environment andthat that, that also is impacting how
they're answering this export question.
I think.
There's been a little slippagerecently, in their confidence in
the long run policy environment.
And we'll get to, another questionthat, that clearly shows that, but
(08:04):
there's still, they're still moreconfident that they were prior to the
'24 election, about, about, about thefuture of, of agriculture production.
And I, I think that's what'sbeing reflected, in this,
in this export question.
Every February since 2016, we have askedproducers about their farm growth plans.
This year, nearly 50%, of therespondents, they said either have no
(08:29):
plans to grow, or expect to reduce theirfarm size over the next five years.
Michael, should we beconcern about these numbers?
Especially when you think about thelong term future of agriculture in U.S.
I think these percentages havebeen very consistent since 2016.
This is one of the ways I'd answerthis question and, and consistently
(08:51):
about 50% really have no growth plansand another 50% have growth plans.
And of that 50% that has no growthplans, 34% of the 50% that have no growth
plans, I expect to stay the same size.
And we don't ask people this,but my hunch, those are sole
proprietors that don't havesomeone coming back to the farm.
(09:11):
And so there's really not as muchpressure for them to, to expand.
It's, we're only seeing 15% exit.
By itself, that might sound, soundreally alarming, but I wanna go to some
of the people that have very aggressivegrowth plans and I think they can easily
pick up the acres, of the people thatare, that are leaving the industry.
There's approximately 15% thatexpect to grow 10% or more per year.
(09:37):
If that materializes, they willdouble in size in five years or less.
And so you've got a groupthat's not growing at all.
In fact some of 'em are retiring,but you also have a group
that really wants to expand.
Some of those are probably bringinganother family member into the
business and really need to expand.
And that should increase theconcentration of the sector.
(09:57):
Yes, obviously, the results are showingthat we're gonna see consolidation,
in, in production agriculture.
In February, we also askedproducers about their farm goals,
and the results are interesting.
More than 90% told us theirfarms have established goals,
objectives, and core values.
(10:19):
When you ask at about their top,priority, nearly 40% said their
most important goal is transitioningthe farm to the next generation.
And 36% said that they plan to bringanother family member full time into
the business within the next five years.
So, Michael, should we understandthis as a signal that a generation
(10:43):
transition is underway in the U.S. in a,is speed more faster than in the past?
What it really shows me isthere's a lot of people wanting
to come back to the farm.
You know, that 36%, that's a lotof people, that are trying to bring
another person back into the business.
And I think we need to relatethis back to the growth.
The reason why, some of the growthexpectations are so aggressive is there's
(11:06):
such a large group here that's reallyprioritizing tr transition Planning
is being their most important goal.
And by the way, some of the othergoals listed are very important.
Profit maximization,reducing debt, soil health.
And so transition planning was byfar and away the most important goal.
And so yes, I, I do think there's a,there's a, there's a, a young group
(11:28):
of producers that want to join theseoperations and, and that's exciting,
to see these new people, you know,wanting to, wanting to take the
realms and or help take the realms,and, and, and manage these farms.
Yeah.
New blood.
Yes.
New energy in the farms.
So moving on, we also ask producershow they plan to use the Farmer
Bridge Assistance Payments isscheduled for late February.
(11:52):
And 47%, they said they willuse the money to pay the debt.
Michael, I'm guessing that does notsurprise you, given the narrow margins
have been over the past year, right?
Yes.
Last month we asked thisquestion, but we asked it only
of corn and soybean producers.
And last month, 50% of the cornand soybean producers were gonna
(12:12):
use the money to pay down debt.
And when we broaden this to all, thepeople in the survey, which is really
moving from about 80% of the respondentsto a hundred percent of the respondents.
We got very similar answer.
Almost half said they'regonna pay down debt.
And, and given the, given the relativelytight, cash flows this year, particularly
again for crop producers, it's no surprisethat they're gonna use this money to, to
(12:33):
help pay operating debt that they mightbe carrying over from the year before, but
also help make those term debt payments.
If you go back to '21 and '22, quitea few of the farms either bought
land or bought machinery, and they'restill paying for those things.
And so certainly this is,this is, this is very helpful.
These payments are gonna be veryhelpful, in making sure that they
can make those term debt payments.
(12:55):
I thought it was really interestingthat about 25% said they were gonna
improve working capital, and, hopefullythey're reading some of our articles on
working capital on our website becausethat's a topic that we've covered a lot.
Uh, so if you want more information,go to our website for that.
Uh, but that was, that was also notsurprising because, because in, in these
relatively tough, financial times, we'vereally drawn down the working capital
(13:18):
and, and, and, and program paymentslike this, help build that up again.
So that was very interesting to see,those out there that may be in the
machinery industry or maybe lenders thatare thinking about borrowing money, uh,
they're looking at buying machinery.
Only 15%, slightly less thanthat, expected to use these
payments to buy machinery.
When we asked that questionof corn soybean producers
(13:40):
in January, it was only 10%.
So a fairly small percent, are gonnabuy machinery and that's certainly
reflective of the times we're in.
If we were in better financial times,first of all, we probably wouldn't have
the bridge payments, but, but if we werein better financial times, more people
would be using the money to buy machines.
So at different times interms of financial stress.
(14:00):
And so when, after a few months ofrelative stability, the Short -Term
Farmland Value Expectation Indexrose to 123 points in February.
The highest reading since May 2025.
So, Michael, what does thistell us about expectations in
the farmland market right now?
It tells me that the land valuesare steady, to increasing slightly.
(14:24):
You know, and this, again, this is a U.S.survey, so it's not necessarily just in
the corn belt or just in the Eastern CornBelt, where we sit today, where we're
seeing, the strength in land values.
And that's certainly really good news, interms of strength of the balance sheet.
You know, land values are criticalpiece of the balance sheet.
And, that's really helping, you know,kind of us weather the financial storm.
(14:45):
And then we also ask at producers,which policies or programs they
expect to be most important to theirfarms over the next five years.
And 55% pointed to the trade policy.
Up from 45% in February last year.
So given everything thathappened with tariffs last year,
(15:06):
that's probably not surprising.
Trade policy now is in the top ofmind for farmers what we could expect.
I know that it was a hot topic in 2025.
Yes, cer certainly since the 2024November election, trade policy has risen
up to being the most important policy.
The charts we have this monthdon't show data before 25 because
(15:28):
we reworded the question andwe don't have the same choices.
That we used to have, but I cantalk a little bit about that.
If you go back for before the '24election, climate policy, environmental
policy, was, was more important andtrade policy was less important.
So certainly, you know, sincethe '24 election, trade policy
overwhelmingly, is the po is thepolicy, that producers, are looking
(15:53):
at, and maybe the most worried about
Yeah, especially if you're givenall the situation related to
tariffs and Chinese markets.
Yes, soybean producers, for example.
And we saw a lot of, impactsin the international market.
Yes.
In South America, Brazil, andArgentina given all this situation.
So finally we ask producers whetherthey think things in the US today
(16:14):
are generally headed in the rightdirection or in the wrong track.
For the first time since July2025, the share shoes in right
directions fell below 60%.
And for the first time morethan 40% select wrong track.
That's, I would say a clear shift.
Michael, does this suggest thatproducer sentiment start to turn more
(16:38):
negative in 2026 compared to 2025?
I'm using these results to,to, talk about why the Index of
Future Expectations is dropped.
I, I think this question is reallyreflecting what I call that, that,
view of the long run policy environmentand, and they're starting to lose
a little bit of faith, if you will.
That the current policies thatthat we're using are actually
(17:00):
going to, are actually gonna bebeneficial to production agriculture.
Having said that, it's still, it'sstill, about 58, 59% think we're
moving the right, right track.
But just to put that in perspective,for most of 2025, that was 75%.
And so that's definitely a shift,in, in, in long term sentiment.
Yeah.
And you are in February, sothere are many things going on.
(17:22):
Yes.
Long of this year.
Yeah.
In terms of trade policy.
So that covers the keyhighlights for this month survey.
You can find the full reporton our website, the links
in the description below.
Thanks so much for watching and don'tforget to like, follow, and subscribe
to receive our reports and insights.
(17:42):
We hope to see you again next month.
Welcome to Purdue Commercial AgCast.
I am Joanna Colussi, aResearch Assistant Professor in
Agricultural Economics at Purdue.
I joined the University lastfall and I'm super excited to
step into this role this month.
I will be joining my colleague,someone you know very well,
Michael Langemeier, Director of theCenter for Commercial Agriculture.
(00:22):
Today we will discuss the results fromthe February 2026, Purdue University
-CME Group Ag Economy Barometer survey.
Each month we interview 400 farmers acrossthe United States to learn more about
their perspectives on the ag economy.
This month's ag barometer surveywas conducted from the second
(00:45):
through the 6th of February.
Before we get started, be sure to followthe page, like this video, and subscribe
so you don't miss future updates.
So let's take a look at the thismonth's Ag Economy Barometer.
(01:07):
The overall index increased abit from 113 points in January,
to 116 points in February.
It's not a huge jump, but one improvement.
Even so we were still well belowwhere we were a year ago - 36 points
lower than last February - andabout 20 points below December.
(01:31):
When you break it apart,it gets interesting.
The Index of Current Conditionsactually improved quite a
bit, up 11 points this month.
So, producers are feeling somewhat betterabout where things stand right now.
But the Index of Future Expectationsis slipped by one point.
(01:53):
So even though current conditionshave improved, there is still a
lot of caution about what's ahead.
Michael, what do you think is drivingthat mix of better current sentiment,
but continue concern about the future?
Well, the current sentiment isreally driven on what's going
on in the ground right now.
And so if you look at net returnsfor crops, they're relatively low.
(02:16):
Livestock net returns are better.
And so if you put those two togetherthat's keeping the current condition index
lower than what it would be otherwise andlower than what it was for most of 2025.
One of the things that's reallydisconcerting to me is how low the Index
of Future Expectations has really gotten.
The current index is the lowestindex since September 2024.
(02:38):
Before election.
Before the election.
And so I think what's going onis, is that the relatively tough
environment we're facing, today, isexpected to continue, into the future.
A couple of the questions that, that gointo the Index of Future Expectations
are worded as, Do you expect to havegood times or bad times, financially
fi in in the next five years?
(02:59):
And so, and so, that's whyI say that's disconcerting.
'Cause it really, it really tells methat the crop producers are expecting
at least two or three more tough years.
And, and that's, that's beingreflected in that relatively low
Index of Future Expectations.
Two related questions askrespondents whether they expect
crop producers or livestockproducers to have good or bad time.
(03:22):
And we continue to see moreoptimism on the livestock side
compared to the crop production.
Michael, as you look ahead, what kindof trend should we expect this year,
given the current situation relatedto the cattle prices, for example?
I think the disparity between, thesentiment between the crop producers
and, and the livestock producers or cropproduction and livestock production is
(03:46):
gonna continue for at least the nextyear, possibly the next two years.
And, and what we're seeing here is,is, like I said, we're seeing some
low net returns in, in the cropsector, really across the board.
Corn, soybean, wheat, and cotton.
That's the primary commodities thatproducers have, that, that we survey,
whereas the, the, the cattle, the cattlegroup is about 20% of all respondents.
(04:08):
And so it's a very important part of thelivestock group that we survey, but also a
very important part of the survey itself.
And, and cattle prices areexpected to remain relatively
high for the foreseeable future.
Just to put this in perspective, youknow, this month in February here,
63% expected crop producers to havebad times in the next five years.
(04:29):
Only 17 percent expected livestockproducers to have bad times.
And so just a very large difference.
And and I think this is gonna continue.
And you can see in the consumerperspective, you see the price
of the meat on the grocery store.
Yeah.
It's continue high.
Meat prices are highand, and demand is high.
Yeah.
And so that just, that's just aperfect storm for, for them to, to
(04:49):
remain having solid net returns,particularly in the cow sector.
That's true.
So let's turn to the FarmCapital Investment Index.
That measure moved up three pointsthis month, reaching 50 points.
Even so, producers remaincautions about large investments.
Around 70% of the respondents saidthat they, they believed now it's a
(05:12):
bad time to buy machinery or buildings.
The results from another questionhelp explain discussions, mood.
We ask at producers.
Looking ahead to the next year,what's your biggest concern
for your farming operation?
The two biggest concerns were highinput costs and low output, prices.
(05:33):
These concerns contribute tothe stress, the financial stress
that you just mentioned regardingthe current net returns and the
agriculture economy as a whole.
Michael, do you see anychange of improvement of these
concerns in the short term?
If you look at the current conditionschart each month, it looks about
the same, after COVID till today.
(05:54):
It really does look the same.
About 45% are very concerned aboutinput costs and anywhere from 25 to
30% are concerned about low prices.
And again, this is primarily coming from,from the crop producers, which represent
about 70% of those that, that we survey.
And so I don't think this isgonna change, anytime soon.
I think those are gonna continue,to be the largest concerns.
(06:17):
And as long as we haverelatively tight net returns.
That, that capital investment indexis, is not going to skyrocket.
In fact, it's been in a very tightband for the last 12 to 18 months.
It's been ranging from approximately50 to 60 for the last 12 to 18 months.
Obviously well below a hundred.
If the index is above a hundred, thatmeans that people are, are, think,
(06:39):
think this is a good time to investin machinery rather than a bad time.
So obviously there's a lot ofpeople that think this is a bad
time, to invest in machinery.
In fact, one of the questions we ask.
Is is you expect to increaseor decrease or remain the same.
The amount of purchases of machinery,only 7% said they were going to increase
the purchase of machinery in 2026.
(07:02):
Extremely low number.
Yeah.
And given the situation'stotally understandable.
Yes it is.
Yeah.
Yeah.
So, turning to the exports, we also ask atfarmers if over the next five years they
expect agriculture exports to increase,decrease or remain about the same.
Compared to the last month,there was a small change.
(07:22):
So even after last year's decliningexports, particularly in soybeans
to China, producers still appearoptimist about the long-term
outlook for international markets.
What could explain this optimist,Michael, in your opinion?
I think it goes, it goes to what I callthe long run policy environment, and
(07:43):
ever since the 2024 election there'sbeen more positivity, towards the,
the long run policy environment andthat that, that also is impacting how
they're answering this export question.
I think.
There's been a little slippagerecently, in their confidence in
the long run policy environment.
And we'll get to, another questionthat, that clearly shows that, but
(08:04):
there's still, they're still moreconfident that they were prior to the
'24 election, about, about, about thefuture of, of agriculture production.
And I, I think that's what'sbeing reflected, in this,
in this export question.
Every February since 2016, we have askedproducers about their farm growth plans.
This year, nearly 50%, of therespondents, they said either have no
(08:29):
plans to grow, or expect to reduce theirfarm size over the next five years.
Michael, should we beconcern about these numbers?
Especially when you think about thelong term future of agriculture in U.S.
I think these percentages havebeen very consistent since 2016.
This is one of the ways I'd answerthis question and, and consistently
(08:51):
about 50% really have no growth plansand another 50% have growth plans.
And of that 50% that has no growthplans, 34% of the 50% that have no growth
plans, I expect to stay the same size.
And we don't ask people this,but my hunch, those are sole
proprietors that don't havesomeone coming back to the farm.
(09:11):
And so there's really not as muchpressure for them to, to expand.
It's, we're only seeing 15% exit.
By itself, that might sound, soundreally alarming, but I wanna go to some
of the people that have very aggressivegrowth plans and I think they can easily
pick up the acres, of the people thatare, that are leaving the industry.
There's approximately 15% thatexpect to grow 10% or more per year.
(09:37):
If that materializes, they willdouble in size in five years or less.
And so you've got a groupthat's not growing at all.
In fact some of 'em are retiring,but you also have a group
that really wants to expand.
Some of those are probably bringinganother family member into the
business and really need to expand.
And that should increase theconcentration of the sector.
(09:57):
Yes, obviously, the results are showingthat we're gonna see consolidation,
in, in production agriculture.
In February, we also askedproducers about their farm goals,
and the results are interesting.
More than 90% told us theirfarms have established goals,
objectives, and core values.
(10:19):
When you ask at about their top,priority, nearly 40% said their
most important goal is transitioningthe farm to the next generation.
And 36% said that they plan to bringanother family member full time into
the business within the next five years.
So, Michael, should we understandthis as a signal that a generation
(10:43):
transition is underway in the U.S. in a,is speed more faster than in the past?
What it really shows me isthere's a lot of people wanting
to come back to the farm.
You know, that 36%, that's a lotof people, that are trying to bring
another person back into the business.
And I think we need to relatethis back to the growth.
The reason why, some of the growthexpectations are so aggressive is there's
(11:06):
such a large group here that's reallyprioritizing tr transition Planning
is being their most important goal.
And by the way, some of the othergoals listed are very important.
Profit maximization,reducing debt, soil health.
And so transition planning was byfar and away the most important goal.
And so yes, I, I do think there's a,there's a, there's a, a young group
(11:28):
of producers that want to join theseoperations and, and that's exciting,
to see these new people, you know,wanting to, wanting to take the
realms and or help take the realms,and, and, and manage these farms.
Yeah.
New blood.
Yes.
New energy in the farms.
So moving on, we also ask producershow they plan to use the Farmer
Bridge Assistance Payments isscheduled for late February.
(11:52):
And 47%, they said they willuse the money to pay the debt.
Michael, I'm guessing that does notsurprise you, given the narrow margins
have been over the past year, right?
Yes.
Last month we asked thisquestion, but we asked it only
of corn and soybean producers.
And last month, 50% of the cornand soybean producers were gonna
(12:12):
use the money to pay down debt.
And when we broaden this to all, thepeople in the survey, which is really
moving from about 80% of the respondentsto a hundred percent of the respondents.
We got very similar answer.
Almost half said they'regonna pay down debt.
And, and given the, given the relativelytight, cash flows this year, particularly
again for crop producers, it's no surprisethat they're gonna use this money to, to
(12:33):
help pay operating debt that they mightbe carrying over from the year before, but
also help make those term debt payments.
If you go back to '21 and '22, quitea few of the farms either bought
land or bought machinery, and they'restill paying for those things.
And so certainly this is,this is, this is very helpful.
These payments are gonna be veryhelpful, in making sure that they
can make those term debt payments.
(12:55):
I thought it was really interestingthat about 25% said they were gonna
improve working capital, and, hopefullythey're reading some of our articles on
working capital on our website becausethat's a topic that we've covered a lot.
Uh, so if you want more information,go to our website for that.
Uh, but that was, that was also notsurprising because, because in, in these
relatively tough, financial times, we'vereally drawn down the working capital
(13:18):
and, and, and, and program paymentslike this, help build that up again.
So that was very interesting to see,those out there that may be in the
machinery industry or maybe lenders thatare thinking about borrowing money, uh,
they're looking at buying machinery.
Only 15%, slightly less thanthat, expected to use these
payments to buy machinery.
When we asked that questionof corn soybean producers
(13:40):
in January, it was only 10%.
So a fairly small percent, are gonnabuy machinery and that's certainly
reflective of the times we're in.
If we were in better financial times,first of all, we probably wouldn't have
the bridge payments, but, but if we werein better financial times, more people
would be using the money to buy machines.
So at different times interms of financial stress.
(14:00):
And so when, after a few months ofrelative stability, the Short -Term
Farmland Value Expectation Indexrose to 123 points in February.
The highest reading since May 2025.
So, Michael, what does thistell us about expectations in
the farmland market right now?
It tells me that the land valuesare steady, to increasing slightly.
(14:24):
You know, and this, again, this is a U.S.survey, so it's not necessarily just in
the corn belt or just in the Eastern CornBelt, where we sit today, where we're
seeing, the strength in land values.
And that's certainly really good news, interms of strength of the balance sheet.
You know, land values are criticalpiece of the balance sheet.
And, that's really helping, you know,kind of us weather the financial storm.
(14:45):
And then we also ask at producers,which policies or programs they
expect to be most important to theirfarms over the next five years.
And 55% pointed to the trade policy.
Up from 45% in February last year.
So given everything thathappened with tariffs last year,
(15:06):
that's probably not surprising.
Trade policy now is in the top ofmind for farmers what we could expect.
I know that it was a hot topic in 2025.
Yes, cer certainly since the 2024November election, trade policy has risen
up to being the most important policy.
The charts we have this monthdon't show data before 25 because
(15:28):
we reworded the question andwe don't have the same choices.
That we used to have, but I cantalk a little bit about that.
If you go back for before the '24election, climate policy, environmental
policy, was, was more important andtrade policy was less important.
So certainly, you know, sincethe '24 election, trade policy
overwhelmingly, is the po is thepolicy, that producers, are looking
(15:53):
at, and maybe the most worried about
Yeah, especially if you're givenall the situation related to
tariffs and Chinese markets.
Yes, soybean producers, for example.
And we saw a lot of, impactsin the international market.
Yes.
In South America, Brazil, andArgentina given all this situation.
So finally we ask producers whetherthey think things in the US today
(16:14):
are generally headed in the rightdirection or in the wrong track.
For the first time since July2025, the share shoes in right
directions fell below 60%.
And for the first time morethan 40% select wrong track.
That's, I would say a clear shift.
Michael, does this suggest thatproducer sentiment start to turn more
(16:38):
negative in 2026 compared to 2025?
I'm using these results to,to, talk about why the Index of
Future Expectations is dropped.
I, I think this question is reallyreflecting what I call that, that,
view of the long run policy environmentand, and they're starting to lose
a little bit of faith, if you will.
That the current policies thatthat we're using are actually
(17:00):
going to, are actually gonna bebeneficial to production agriculture.
Having said that, it's still, it'sstill, about 58, 59% think we're
moving the right, right track.
But just to put that in perspective,for most of 2025, that was 75%.
And so that's definitely a shift,in, in, in long term sentiment.
Yeah.
And you are in February, sothere are many things going on.
(17:22):
Yes.
Long of this year.
Yeah.
In terms of trade policy.
So that covers the keyhighlights for this month survey.
You can find the full reporton our website, the links
in the description below.
Thanks so much for watching and don'tforget to like, follow, and subscribe
to receive our reports and insights.
(17:42):
We hope to see you again next month.
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