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The Purdue University - CME Group Ag Economy Barometer released last week highlighted a sharp drop in farmer sentiment in January. Purdue ag economists Michael Langemeier and Joana Colussi followed up in a farmdoc daily paper with a closer look at rising signs of financial stress.
The January survey each year asks farmers about operating loans. Over the last seven years, the percentage of respondents who indicated they expected to have larger operating loans ranged from 15% in 2020 and 2024 to 27% in 2022. In January, the percentage who responded “larger” rose to 21% from 18% in 2025.
When producers expecting a larger loan were asked why:
- 31% said it was due to unpaid operating debt from the previous year, up from 23% in 2025 and just 5% in 2023
- 54% cited higher input costs, while 15% said expanding operations
Langemeier and Colussi used the data to build an implicit index of financial stress, multiplying the percentage of respondents with larger operating loans by the percentage of respondents that chose “unpaid operating debt from prior years” as the primary reason for a larger loan. That index has ranged from a low of 1.1 in 2023 to 6.5 in 2026, topping 2020 at 5.3, which followed a 2014-2019 stretch of relatively low net returns, the economists noted.
- “The increase in this implicit index suggests that financial stress increased in 2025, reflecting higher input costs, tighter margins, and greater reliance on operating debt carried over from prior years,” the economists wrote.
Moldy beans in Mato Grosso: Pro Farmer crop consultant Michael Cordonnier observed that weeks of persistent heavy rains have resulted in low quality soybeans in the northern half of Mato Grosso. He says some farmers report soybeans harvested at 30-35% moisture to get them out of the field before seed quality further deteriorated. Coronnier said they are reporting that 30% or more of the seeds are moldy, shriveled, broken, or otherwise of such poor quality that grain elevators won’t accept them because they cannot be blended with good quality seed and still meet the international standard.
- Cordonnier left his Brazilian soybean estimate unchanged this week at 179.0 million tons with a neutral to slightly higher bias. In addition to the quality problems, hot and dry conditions have continued in southern Brazil.
- Both situations may not necessarily result in a lower estimate, but could keep it from moving higher, he said.
Sterile fly timeline: USDA will open a facility in Texas by the end of next year to produce sterile flies intended to fight the flesh-eating parasite New World screwworm, Secretary Brooke Rollins said on Monday, according to Reuters. Rollins provided an update after announcing plans for the $750 million facility in August. USDA produces 100 million sterile flies per week at a facility in Panama, which are dispersed in Mexico to prevent wild screwworm flies from reproducing. The agency opened a dispersal facility for sterile flies in southern Texas on Monday, but experts have said USDA urgently needs to produce many more, the report noted.
Protestors at Cargill Brazil terminal: A branch of Brazil’s federal public prosecutors’ office denounced the potential use of force to remove Indigenous protesters from area around a Cargill port terminal in the Amazon, Reuters reported, citing a statement late last week.
Indigenous groups have been protesting at the company’s Santarem terminal gate since January 22 against a project to dredge the Tapajos river, where traders rely on barges to move grains for export via northern ports.
Check out the latest Pro Farmer podcast: How current stocks-to-use levels may influence market action