Rural economic confidence remains dreary as Creighton University’s latest Rural Mainstreet Index (RMI) fell below the growth-neutral 50 mark for the 17th time in 18 months.
Mid-America’s economy continues to struggle. The monthly survey of bank CEOs across a 10-state region reliant on agriculture and energy shows a slump in the overall reading to 38 in February, down from 42.3 in January.
Each month, community bank presidents and CEOs in nonurban, agriculturally and energy-dependent areas assess current economic conditions and provide a six-month outlook. The RMI covers approximately 200 rural communities with an average population of 1,300 people, offering a real-time snapshot of economic trends in the nation’s heartland.
The survey of bankers found that over 70% expect positive cash flow for ranchers in 2025, while nearly half expect grain farmers to experience negative cash flow.
“Despite another one-year extension of the farm bill and $20.8 billion in farm disaster relief, the farm (grain) economic outlook remained weak for the first half of 2025,” said Ernie Goss, chair of regional economics at Creighton University. “However, grain prices have recently improved, but not enough for profitability for many producers. On the other hand, regional livestock producers continue to experience solid prices, thus maintaining profitability.”
According to the latest Rural Mainstreet survey, only 9% of rural bankers foresee positive outcomes from President Donald Trump’s tariff policies.
“We’ve built up good relationships with both Mexico and Canada over the years,” said Jeffrey Gerhart, chairman of the Bank of Newman Grove in Nebraska. “Working together with Mexico and Canada would be a better course of action than threatening our two longtime trading partners with tariffs.”
Despite concerns over trade policy, agricultural exports from the region rose by $747.8 million in 2024 compared to 2023, a 6.1% increase, according to data from the International Trade Association. Mexico remained the top regional agricultural and livestock export destination, accounting for 47.7% of total shipments.
The February RMI highlights continued struggles in the agricultural sector, with farmland prices and farm equipment sales remaining weak.
For the eighth time in the past nine months, farmland prices fell below the growth-neutral mark. The region’s farmland price index dropped to 40 in February, its lowest level since October 2024 and down from 42 in January.
“Elevated interest rates and higher input costs, along with below-breakeven prices for a high share of grain farmers in the region, have put downward pressure on ag land prices,” said Goss.
Meanwhile, the farm equipment sales index showed slight improvement, inching up to 18.2 from January’s 17.4—still firmly in negative territory.
State highlights
The latest survey highlights varying economic conditions across the Midwest and Plains states, with some regions showing promising signs of growth while others continue to struggle.
Colorado, Minnesota, Missouri and Wyoming were among the states that saw gains in their indexes. Colorado led the way, with its RMI surging to 66.3 in February from 57.2 in January, although farmland prices dropped. The state also experienced a 101.9% increase in agricultural exports, with Mexico remaining its top trading partner.
Minnesota’s economy showed strong growth, as its RMI climbed from 52.5 to 62.4, though farmland values declined slightly. Missouri also posted a modest gain, with its RMI rising to 55.2 from 54.5, alongside a slight increase in farmland prices. Wyoming’s RMI inched up slightly to 34.7 from 34.1, but the state’s farmland price index slipped, and it was the only state in the survey to report a decline in agricultural exports, falling by 17.8%.
In contrast, several states experienced downturns in economic conditions. Kansas’ RMI dropped to 36.8 in February from 40.1 in January, signaling continued strain as farmland prices also fell. Nebraska’s RMI dipped to 37.0 from 39.2, while its farmland price index declined slightly. North Dakota’s RMI slipped to 49.8 from 51.2, although it saw a slight increase in farmland values. South Dakota’s economy struggled the most, with its RMI falling sharply to 31.4 from 42, and farmland prices continuing their downward trend. Despite weak economic conditions, most states still reported gains in agricultural exports. Nebraska saw a 12% increase, while North Dakota’s exports rose by 11.7%. Kansas had minimal growth, while South Dakota posted only a 1.1% increase. — Charles Wallace, WLJ contributing editor
