Iowa’s rural mainstreet index increased from 41.4 in September to 43.5 in October, according to Creighton University’s Rural Mainstreet Index, which was released last week.

But the state’s farmland-price index for October slumped to 45.9 from September’s 61.5, and its new-hiring index fell to 44.2 from 45.9 last month. According to U.S. Bureau of Labor Statistics data, Iowa’s Rural Mainstreet Economy has expanded employment by 0.8% over the past 12 months, with a 1.4% increase for urban areas in the state for the same time period.

“Corn and soybean yields are higher than most farmers expected, considering we are in a drought area,” Terry Engelken, vice president and lender at Washington State Bank in Washington, Iowa, said in a prepared statement.

The 10-state region’s overall reading sank to 44.4 from September’s 49.5, its lowest level of 2023. The index ranges from 0 to 100, with a reading of 50.0 representing growth neutral.

“This is the weakest recorded reading for 2023 and points to weaker farm and non-farm economies,” Ernie Goss, Creighton University’s chair in regional economics, said in a press release. “Despite this weakness, only 26.8% of banks reported tightening credit standards for farmers, while 34.5% indicated that their bank had tightened credits standards for businesses in their area.”

Bankers were asked what the greatest challenge to farming profitability over the next 12 months is, and 44.4% said low or falling crop prices. Meanwhile, 22.2% said rising or high interest rates, 14.8% said rising or high farm input costs, 7.4% said trade barriers and trade restrictions, and the remaining 11.2% named other factors such as low hog prices and marketing of crops.

In other regional findings from the report:

• The farmland price index dropped to 55.6 from September’s 65.4.
• The farm equipment sales index increased slightly to 48.0 from 44.0.
• The loan volume index climbed to 77.7 from September’s 70.3; the checking deposit index slumped to 26.9 from September’s 35.2; and the index for certificates of deposit and other savings instruments increased to 59.6 from 59.3.
• The new hiring index stayed unchanged from September’s 49.2. Despite the weaker readings, rural areas in the region continue to experience a healthier job market than urban areas in the same 10 states, according to the release.
• The business confidence index dropped to 24.1 from 26.8 in September. “This month’s reading is the most negative outlook recorded since May 2020,” Goss said. “Over the past 12 months, the regional confidence index has fallen to levels indicating a very negative outlook.”
• The home sales index increased to 40.4 in October from 37.0.
• The retail sales index dropped to 46.3 from 48.1. “Higher consumer debt and elevated interest rates are cutting into retail sales,” Goss said.