Rural Mainstreet Economy Falls Again
The overall Rural Mainstreet index fell below growth neutral for the 17th time in the past 18 months.
*For the ninth time in the past 10 months, farmland prices sank.
*Only 9% of bankers expect positive outcomes for Rural Mainstreet from President Trump’s tariff actions.
*On average, 70.8% of bankers expect livestock ranchers to experience positive cash flow or net income in 2025. Almost half of bankers expect grain farmers to experience negative cash flow in 2025.
*Farm equipment sales dropped for the 18th straight month.
*Regional retail sales deteriorated to the lowest level since the pandemic.
*According to trade data from the International Trade Association (ITA), regional exports of agriculture goods and livestock for all of 2024, compared to 2023, rose by $747.8 million for a 6.1% gain.
*Mexico was the number-one destination for 2024 ag exports, accounting for 47.7% of total regional agriculture and livestock exports.
OMAHA, Neb. (Feb. 20, 2025) — For the 17th time in the past 18 months, the overall Rural Mainstreet Index (RMI) sank below the 50.0 reading in February, 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 February slumped to a weak 38.0 from 42.3 in January. The index ranges between 0 and 100, with a reading of 50.0 representing growth neutral.
Only 9% of bankers expect positive outcomes for Rural Mainstreet from President Trump’s tariff actions.
Jim Eckert, CEO of Anchor State Bank in Anchor, Illinois, said, “The ‘jury is still out’ on the changes coming from the Trump administration, but our customers are almost universally favorable towards efforts to close the border and deport illegal aliens as well as favorable to DOGE attempts to clean up government waste/fraud and efforts to reduce the size of federal government.”
Jeffrey Gerhart, Chairman of the Bank of Newman Grove and former Chairman of the Independent Community Bankers of America, said, “We’ve built up good relationships with both Mexico and Canada over the years. Working together with Mexico and Canada would be a better course of action than threatening our two longtime trading partners with tariffs.”
“The economic outlook for grain farmers remained weak for 2025. 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 with only 9.3% of bankers expecting negative cash flow for ranchers in 2025,” said Ernie Goss, PhD, Jack A. MacAllister Chair in Regional Economics at Creighton University’s Heider College of Business.
Other comments from bankers in February:
Jim Eckert, CEO of Anchor State Bank in Anchor, Illinois, said, “Area farmers are somewhat optimistic going into the 2025 crop. Our area is somewhat "dry", but the situation is not serious yet.”
According to Jeffrey Gerhart, Chairman of the Bank of Newman Grove and former Chairman of the Independent Community Bankers of America, “The fallout from the actual tariffs remains to be played out, but I don’t believe that it will be good for the folks down on the farm.”
Farming and ranch land prices: For the 8th time in the past nine months, farmland prices sank below growth neutral. The region’s farmland price index fell to 40.0, its lowest level since October 2024, and down from 42.0 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.
This month, bank CEOs were asked to project 2025 grain and livestock net cash flow or income. On average, 70.8% of bankers expect livestock ranchers to experience positive cash flow or net income for the year. On the other hand, only 54.2% of bank CEOs forecast grain farmers to breakeven or earn a profit for 2025.
According to trade data from the International Trade Association (ITA), regional exports of agriculture goods and livestock for all of 2024, compared to 2023, rose by $747.8 million for a 6.1% gain. Mexico was the number-one destination for 2024 ag exports, accounting for 47.7% of total regional agriculture and livestock exports.
Farm equipment sales: The farm equipment sales index rose to a very weak 18.2 from January’s 17.4. “This is the 19th straight month that the index has fallen below growth neutral. High input prices, tighter credit conditions and weak farm grain prices are having a negative impact on the purchases of farm equipment,” said Goss.
Banking: The February loan volume index increased to 60.4 from January’s 60.0. The checking deposit index climbed to 58.7 from 48.0 in January. The index for certificates of deposits (CDs) and other savings instruments climbed to 62.5 from 58.0 in January. Federal Reserve interest rate policies have boosted CD purchases above growth neutral for 27 straight months.
Hiring: The new hiring index for February dropped to 43.5 from January’s 47.9.
Confidence: Rural bankers remain pessimistic about economic growth for their area over the next six months. The February confidence index sank to 40.0 from January’s 42.3. “Weak grain prices and negative farm cash flows, combined with downturns in farm equipment sales over the past several months, continued to push banker confidence below growth neutral,” said Goss.
Home and retail sales: Home sales softened from an already weak reading of 40.0 in January to 37.0 in February. Regional retail sales deteriorated to the lowest level since the pandemic to 28.3 from 44.0 in January.
The survey represents an early snapshot of the economy of rural agriculturally- and energy-dependent portions of the nation. The Rural Mainstreet Index is a unique index that covers 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. Goss and the late Bill McQuillan, former Chairman of the Independent Community Banks of America, created the monthly economic survey and launched it in January 2006.
Below are the state reports:
Colorado: The state’s Rural Mainstreet Index (RMI) for February rose to 66.3 from 57.2 in January. The farmland and ranchland price index for February declined to 47.3 from January’s 53.2. The state’s new hiring index declined to 52.5 from January’s 61.1. According to trade data from the International Trade Association (ITA), Colorado exports of agriculture goods and livestock for all of 2024, compared to 2023, rose by $227.5 million for a 101.9% gain. Mexico was the number-one destination for 2024 ag exports, accounting for 18.4% of total Colorado agriculture and livestock exports.
Illinois: The state’s February Rural Mainstreet Index (RMI) plummeted to 34.2 from 49.2 in January. The farmland price index declined to 42.5 from January’s 43.7. The state’s new hiring index sank to 42.5 from 50.1 in January. According to trade data from the ITA, Illinois exports of agriculture goods and livestock for all of 2024, compared to 2023, rose by $715.8 million for a 15.8% gain. China was the number-one destination for 2024 ag exports, accounting for 30.3% of total state agriculture and livestock exports.
Iowa: February’s RMI for the state slumped to 32.8 from 40.7 in January. Iowa’s farmland price index for February sank to 38.1 from 41.3 in January. Iowa’s new hiring index for February dropped to 40.8 from January’s 46.2. According to ITA trade data, Iowa exports of agriculture goods and livestock for all of 2024, compared to 2023, rose by $30.2 million for a 2.0% gain. Mexico was the number-one destination for 2024 ag exports, accounting for 63.4% of total state agriculture and livestock exports.
Kansas: The Kansas RMI for February sank to 36.8 from January’s 40.1. The state’s farmland price index dropped to 39.3 from 41.1 in January. The new hiring index for Kansas slumped to 42.2 from 46.2 in January. According to trade data from the ITA, Kansas exports of agriculture goods and livestock for all of 2024, compared to 2023, rose by $3.5 million for a 0.3% gain. Mexico was the number-one destination for 2024 ag exports, accounting for 71.2% of total state agriculture and livestock exports.
Minnesota: The February RMI for Minnesota soared to 62.4 from 52.5 in January. Minnesota’s farmland price index dropped to 46.5 from 49.0 in January. The new hiring index for February declined to 51.2 from 55.4. According to trade data from the ITA, Minnesota exports of agriculture goods and livestock for all of 2024, compared to 2023, sank by $200.8 million for a 16.2% decline. Mexico was the number-one destination for 2024 ag exports, accounting for 39.0% of total state agriculture and livestock exports.
Missouri: The state’s February RMI climbed to 55.2 from 54.5. The farmland price index for February increased to 61.5 from January’s 61.0. The state’s new hiring gauge for February declined to 69.7 from January’s 70.3. According to trade data from the ITA, Missouri exports of agriculture goods and livestock for all of 2024, compared to 2023, slumped by $249.4 million for a 20.2% decline. Mexico was the number-one destination for 2024 ag exports, accounting for 83.6% of total state agriculture and livestock exports.
Nebraska: The Nebraska Rural Mainstreet Index for February decreased to 37.0 from 39.2 in January. The state’s farmland price index for February dipped to 39.3 from January’s 40.9. Nebraska’s new hiring index fell to 42.2 from January’s 45.9. According to trade data from the ITA, exports of agriculture goods and livestock for all of 2024, compared to 2023, rose by $104.9 million for a 12.0% gain. Mexico was the number-one destination for 2024 ag exports, accounting for 70.1% of total state agriculture and livestock exports.
North Dakota: North Dakota’s RMI for February dropped to 49.8 from 51.2. The state’s farmland price index increased slightly to 45.6 from 44.3 in January. The state’s new hiring index fell to 46.2 from 50.1 in January. According to trade data from the ITA, North Dakota exports of agriculture goods and livestock for all of 2024, compared to 2023, rose by $115.7 million for a 11.7% gain. Mexico was the number-one destination for 2024 ag exports, accounting for 46.0% of total state agriculture and livestock exports.
South Dakota: The February RMI for South Dakota slumped to 31.4 from 42.0 in January. The state’s farmland price index sank to 37.7 from 40.5 in January. South Dakota’s February new hiring index fell to 40.3 from January’s 45.4. According to trade data from the ITA, South Dakota exports of agriculture goods and livestock for all of 2024, compared to 2023, rose by $1.4 million for a 1.1% gain. Mexico was the number-one destination for 2024 ag exports, accounting for 76.9% of total state agriculture and livestock exports.
Wyoming: The February RMI for Wyoming increased to 34.7 from 34.1 in January. The February farmland and ranchland price index decreased to 38.7 from January’s 39.4. Wyoming’s new hiring index fell to 41.5 from January’s 44.1. According to trade data from the ITA, Wyoming exports of agriculture goods and livestock for all of 2024, compared to 2023, sank by $1.0 million for a 17.8% fall. Canada was the number-one destination for 2024 ag exports, accounting for 57.8% of total state agriculture and livestock exports.