Ag Economy Barometer shows sharp decline in outlook and investment plans
Farmer sentiment weakened significantly in January 2026 as concerns about the agricultural economy increased. The Ag Economy Barometer showed a sharp decline compared to December, reflecting growing financial pressure and uncertainty across farm operations.
Both current conditions and future expectations dropped noticeably. Farmers were especially pessimistic about the long-term outlook for U.S. agriculture. Confidence about whether agriculture would experience good times over the next five years fell to its lowest level since late 2024. Concerns about agricultural exports also increased compared to the previous month.
Many producers reported financial strain. About half of the farmers surveyed said their operations were worse off than one year earlier. Looking ahead, more producers expected their financial condition to worsen than improve over the next twelve months. This shift in outlook highlights the pressure caused by lower commodity prices and higher production costs.
Investment intentions also declined. The Farm Capital Investment Index fell to its lowest point in over a year. Only a small share of respondents planned to increase farm machinery purchases in the coming year, showing that farmers are holding back on major spending decisions.
Operating loan needs continued to rise. A higher percentage of farmers expected their operating loans to be larger than the year before. While increased input costs remained the main reason, a growing number of producers reported that unpaid operating debt from prior years was contributing to higher loan balances. This trend points to ongoing cash-flow challenges.
The survey also asked corn and soybean producers about payments from the Farmer Bridge Assistance Program. Most respondents said they planned to use the funds to reduce debt or improve working capital. Smaller portions are expected to use the payments for family living expenses or machinery investments.
Overall, the results show that farmers entered 2026 with a more cautious and pessimistic mindset. Expectations for both short-term and long-term financial conditions weakened, suggesting continued uncertainty for the agricultural sector.
Photo Credit: gettyimages-nicexray