Farmer sentiment improved modestly in February as current conditions rebounded, but producers expressed deepening pessimism about the future, according to the latest Purdue University-CME Group Ag Economy Barometer released Monday.
The overall barometer index rose from 113 points in January to 116 in February, driven by an 11-point increase in current conditions. However, the Future Expectations Index dropped 1 point and now sits 45 points lower than February 2025, reaching its lowest level since September 2024.
The survey, conducted February 2-6, revealed stark differences in how farmers view their immediate situation versus long-term prospects. While current conditions improved, 44% of respondents said their farm operations were worse off than a year earlier. Looking ahead 12 months, 29% expected worse financial performance compared with just 18% who anticipated better results.
Export concerns persist despite improvement
Agricultural export pessimism moderated slightly from January but remained elevated compared to December levels. About 14% of respondents expected exports to decline over the next five years, down from 16% in January but up sharply from 5% in December.
The percentage of producers who believe the U.S. is headed in the “right direction” dropped for the second consecutive month, falling from 62% in January to 59% in February. This represents a significant decline from the 75% recorded in December.
Expansion plans remain despite challenges
Despite concerns, approximately 51% of farmers plan to expand their operations within five years, with 14% targeting growth of 10% or more. Additionally, 36% expect to bring another family member into the business during that timeframe.
However, only 7% plan to increase farm machinery purchases in the upcoming year, and the Farm Capital Investment Index rose just 3 points to 50.
Farmland values show divergent trends
Short-term farmland value expectations strengthened, with the index climbing from 117 to 123. Long-term farmland optimism continued declining, dropping to 150 in February after reaching a record high of 166 in December.
Regarding the Farmer Bridge Assistance Program announced in December, 47% of respondents plan to use payments for debt reduction, while 27% will improve working capital.
The survey highlighted a notable disparity between crop and livestock producers, with 63% expecting bad times for crop operations compared to just 17% for livestock operations.
