The overall Rural Mainstreet Index (RMI) climbed above the 50.0 growth neutral reading in June, marking its highest level since July 2023, 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 June rose to 51.9 from May’s 44.0. The index ranges between 0 and 100, with a reading of 50.0 representing growth neutral.
“This is only the third time in two years the overall index has moved above growth neutral. Despite the significant increase for the month, on average, bankers expect approximately one in four farmers to experience negative income for farmers in their area,” says Creighton University’s Ernie Goss, who conducts the survey.
Regarding the Federal Reserve’s short-term interest rate decision this week, three out of four bank CEOs agreed with the Fed’s decision to maintain the current rate. Approximately 22.2% recommend a 0.25% (25 basis points) rate cut, while the remaining 3.7% argue for a 0.25% rate increase.
Farming and ranch land prices: For the 13th time in the past 14 months, farmland prices slumped below growth neutral. The region’s farmland price increased slightly to a weak 40.9 from 39.6 in May. “Elevated interest rates, higher input costs and volatility from tariffs have put downward pressure on farmland prices,” says Goss.
Farm equipment sales: The farm equipment sales index slumped to a very weak 22.7 from 23.9 in May. “This is the 22nd straight month 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,” states Goss.
Confidence: Rural bankers remain pessimistic about economic growth for their area over the next six months. The June confidence index increased to a frail 37.0 from May’s 30.0. “Weak grain prices and negative farm cash flows, combined with tariff retaliation concerns, pushed banker confidence lower,” notes Goss.
On average, bankers project 24.7% of farmers will experience negative income for 2025. “Despite weak farm income for 2023, 2024 and now 2025, bankers report farm loan delinquency rates have risen only 1.1% over the past six months,” observes Goss.
The Rural Mainstreet Index is a unique index covering 10 regional states, focusing on approximately 200 rural communities with an average population of 1,300. The index provides the most current real-time analysis of the rural economy, Creighton University states.