The economic outlook for rural communities across the Midwestern United States continues to reflect contraction, as the Rural Mainstreet Index (RMI) remains below the growth threshold for the seventh time this year. September’s reading came in at 38.5, down from 48.1 the previous month, indicating ongoing challenges in a region heavily reliant on agriculture and energy sectors. The index, which spans ten states including Colorado, Wyoming, and Illinois, uses data gathered from bank CEOs in approximately 200 small towns averaging 1,300 residents each. A value of 50.0 signifies economic stability, with figures below that mark signaling decline.
Dr. Ernie Goss of Creighton University, who oversees the monthly survey, highlighted persistently low grain commodity prices as a primary drag on regional economic activity. Nearly 75% of surveyed banking leaders identified falling agricultural prices as the most significant threat to financial operations in the coming year. Additionally, rising interest rates and increased production costs are contributing to weakened farm profitability and reduced investment capacity.
Farmland values have also trended downward, registering a drop to 45.8 in September from 46.2 in August—marking the 16th instance in the past 17 months that the farmland price index has fallen beneath neutral growth levels. Goss attributed this to sustained financial pressure on producers, including narrow profit margins and elevated borrowing costs.
The farm equipment sales index showed minimal improvement, rising slightly to 15.2 from 14.6, yet remaining deeply in negative territory. This marks the 25th consecutive month of subpar equipment demand, driven by volatile markets, tighter lending standards, and ongoing trade-related uncertainties, including tariff impacts.
Banker confidence in future regional economic performance remains low, though it edged up to 32.7 from 27.8 in August. Despite the slight uptick, sentiment remains pessimistic, influenced by weak crop revenues, unfavorable cash flow conditions, and concerns over retaliatory trade measures affecting export markets.
According to USDA data cited by Goss, the ten-state region accounted for 36.9% of total U.S. agricultural output in 2024, underscoring its national significance. The RMI serves as a timely barometer of rural economic health, offering real-time insights into an often-overlooked segment of the national economy.
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Rural Mainstreet Economic Indicator Remains in Red
An indicator of economic health in Midwestern rural areas remains solidly in the negative. For the seventh time this year, the Rural Mainstreet Index (RMI) remains below growth neutral, according to the monthly survey of bank CEOs in rural areas of a 10-state region dependent on agriculture and/or energy. n nOverall: The region’s overall reading for September is 38.5 down from 48.1 in August. The index ranges between 0 and 100, with a reading of 50.0 representing growth neutral. n n“Weak agriculture commodity prices for grain producers continue to dampen economic activity in the 10-state region. Almost three of four bank CEOs and chief loan officers indicate falling agriculture commodity prices represent the greatest threat to banking operations over the next 12 months,” says Dr. Ernie Goss, Creighton University, who conducts the survey. n nApproximately three of four bank CEOs report tariff increases have had a negative impact on farm operations. n nFarming and ranch land prices: For the 16th time in the past 17 months, farmland prices are below growth neutral. The region’s farmland price index dropped to 45.8 from 46.2 in August. “Elevated interest rates, higher input costs and below breakeven grain prices put downward pressure on farmland prices,” states Goss. n nAccording to the USDA data, the 10-state region produced 36.9% of U.S. 2024 agriculture output, he notes. n nFarm equipment sales: The farm equipment sales index improved slightly to a very weak 15.2 from August’s 14.6. “This is the 25th straight month the index has fallen below growth neutral. High input costs, tighter credit conditions, low farm commodity prices and market volatility from tariffs are having negative impacts on the purchases of farm equipment,” notes Goss. n nConfidence: Rural bankers remain pessimistic about economic growth for their area over the next six months. The September confidence index increased to a still very weak 32.7 from 27.8 in August. “Weak grain prices and negative farm cash flows, combined with tariff retaliation concerns, pushed banker confidence lower,” says Goss. n nThe RMI is a unique index covering 10 regional states from Colorado and Wyoming to Illinois, 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.