The Rural Mainstreet Index produced by economists at Creighton University improved to 44 in May from April’s 40. It’s the 20th time in the past 21 months that the index has been below growth neutral for the 10-state region reliant on the agriculture and energy sectors.

“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% ranked lower farm commodity prices as the major risk factor for farmers,” Ernie Goss, Jack A. MacAllister chair in regional economics at Creighton University’s business school, said in a press release.

Bank CEOs chime in
Rural bank CEOs answer a monthly survey as part of the index data collection and 54% of respondents this time called for an extension of 2017 federal tax cuts.

Terry Engelken, vice president of Washington State Bank in Washington, Iowa, said, “I think the SALT [state and local tax] limit should be raised to $25,000 from $10,000 and no tax on tips and Social Security.” He said that overtime should still be taxed.

Jeffrey Gerhart, former chairman of the Bank of Newman Grove in Newman Grove, Neb., said, “As a former agricultural banker, I’ve never been a fan of tariffs. I’m even less of a fan of the present tariffs that the administration is pursuing. My concern is that it won’t end well for our farm economy and our rural communities. Congress needs to step up and do their job and not leave it all up to the administration.”

Jim Eckert, executive vice president and trust officer of Anchor State Bank in Anchor, Ill., reported that, “Planting is nearly complete in our area of central Illinois [except for the usual ‘stragglers’]. Our farmers who have been in southern Illinois say the further south you get the less has been planted due to very wet conditions.”

Low ag commodity prices a top concern
When asked to name the top risk factor for farming in 2025, 68% named lower ag commodity prices as the No. 1 2025 concern, while 23.5% indicated higher tariffs as the top risk factor.

For the 12th time in the past 13 months, farmland prices sat 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% of bank CEOs are bullish on farmland prices for 2025,” Goss stated.

According to trade data from the International Trade Association (ITA), regional exports of agriculture goods and livestock for the first quarter of 2025, compared to the same 2024 period, fell from $3.4 billion in 2024 to $2.7 billion in 2025 for a decline of 19.3%. Mexico was the top destination for regional ag exports during the first quarter, accounting for 50.6% of total regional agriculture and livestock exports.

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,” Goss stated.

Other economic categories in the index had mixed results:

• Banking: The May loan volume index advanced to 75 from 70.8 in April. The checking deposit index fell to 45.8 from April’s 58.7. The index for certificates of deposits (CDs) and other savings instruments rose to 60.4 from 58.3 in April. Federal Reserve interest rate policies have boosted CD purchases above growth neutral for 30 straight months.
• Hiring: The new hiring index for May improved to 52.1 from April’s 43.8. Job gains for non-farm employers have been weak for the last several months.
• Confidence: Rural bankers remain pessimistic about economic growth for their area over the next six months, Goss reported. The May confidence index dropped to 30.0 from 36.0 in April. “Weak grain prices, negative farm cash flows, combined with tariff retaliation concerns pushed banker confidence lower,” Goss stated.
• Home and retail sales: Home sales remained soft with a May reading of 47.9, up from 45.8 in April. Regional retail sales remained weak with an index of 41.7, but up from April’s 39.6.

For Iowa, May’s index reading improved to a weak 46.8 from 39.8 in April. Iowa’s farmland price index for May increased to 41.6 from 36.8 in April. Iowa’s new hiring index for May increased to 44.9 from April’s 37.5. According to trade data from ITA, Iowa exports of agriculture goods and livestock for the first quarter of 2025, compared to the same period in 2024, sank by $23 million for a decline of 4.7%. Mexico was the top destination for the first quarter, accounting for 70.9% of 2025 Iowa agriculture and livestock exports.