For the 20th time in the past 21 months, the overall Rural Mainstreet Index (RMI) sank below the 50.0 growth neutral reading in May, according to the monthly survey of bank CEOs in rural areas of a 10-state region dependent on agriculture and/or energy.
Overall: The region’s overall reading for May increased to 44.0 from April’s 40.0. The index ranges between 0 and 100, with a reading of 50.0 representing growth neutral.
“The economic outlook for 2025 farm income remains weak according to bank CEOs. Almost one in four bankers rate tariff retaliation from trading partners as the top risk facing farmers in 2025 while 68% rank lower farm commodity prices as the major risk factor for farmers,” says Creighton University’s Ernie Goss, who conducts the survey.
Regarding the tax deliberations going on in Congress, a majority, or 54.2%, argue for extending the tax cuts as passed in 2017.
Farming and ranch land prices: For the 12th time in the past 13 months, farmland prices slumped below growth neutral. The region’s farmland price index dropped to 39.6 from 41.7 in April. “Elevated interest rates, higher input costs and volatility from tariffs have put downward pressure on ag land prices. Only 8.0% of bank CEOs are bullish on farmland prices for 2025,” says Goss.
When asked to name the top risk factor for farming in 2025, 68% named lower ag commodity prices as the number one 2025 concern, while 23.5% indicated higher tariffs as the top risk factor.
Farm equipment sales: The farm equipment sales index increased to a very weak 23.9 from 17.4 in April. “This is the 21st straight month that the index has fallen below growth neutral. High input prices, tighter credit conditions, low farm commodity prices and market volatility from tariffs are having a negative impact on the purchases of farm equipment,” notes Goss.
Confidence: Rural bankers remain pessimistic about economic growth for their area over the next six months. The May confidence index slumped to 30.0 from 36.0 in April. “Weak grain prices, negative farm cash flows, combined with tariff retaliation concerns pushed banker confidence lower,” says Goss.
Creighton University says the survey represents an early snapshot of the economy of rural agriculturally -- and energy-dependent portions of the nation. The RMI covers 10 regional states, focusing on approximately 200 rural communities with an average population of 1,300.