Ah, the economic pulse of our Midwestern rural areas appears rather bleak, I’m afraid. For the seventh time this year, the Rural Mainstreet Index (RMI) is below growth neutral. This is based on the monthly survey of bank CEOs in a 10-state region heavily reliant on agriculture and energy.
confidence: There’s a certain air of pessimism amongst rural bankers regarding economic growth prospects for the next six months. The confidence index for September edged up to 32.7 from August’s 27.8, yet it remains depressingly low. Dr. Ernie Goss of Creighton University comments, “Weak grain prices, negative cash flows, and tariff concerns make for a grim outlook.”
according to the USDA data, this particular region contributes a sizeable 36.9% of U.S. agriculture output as of 2024. Such an integral part of agriculture surely highlights the significance of these findings.
farming and ranch land prices: It seems the cloud hangs heavy here as well. For the 16th time in 17 months, farmland prices appear below growth neutral. The index for farmland prices sees a slight dip to 45.8 from 46.2 in August. Goss remarks, “Elevated interest rates, increased costs, and subpar grain prices are putting farmland under pressure.”
farm equipment sales: A slight improvement has graced us, though the picture remains grim. The equipment sales index now sits at 15.2, up from August’s rather dismal 14.6. “Market volatility from tariffs, coupled with high costs and low commodity prices, puts a damper on equipment purchases,” says Goss.
overall: In September, the overall reading for the region fell to 38.5 from August’s 48.1. The index, you see, ranges between 0 and 100, where 50.0 signifies growth neutral. “Weak agriculture commodity prices continue to stifle economic activity in the region. Around 75% of bank CEOs highlight falling prices as the prime threat to their operations in the coming year,” notes Goss.
approximately three-quarters of bank CEOs also report that tariff increases cast a shadow over farm operations.
the RMI provides crucial insights into the 10 states from Colorado and Wyoming across to Illinois. It covers about 200 rural communities with an average population of 1,300, offering timely analysis of the rural economy, according to Creighton University.
