The overall Rural Mainstreet Index moved to above growth neutral 50.0 for January, according to the latest monthly survey of bank CEOs in rural areas of a 10-state region dependent on agriculture and/or energy. The region’s overall reading for January climbed to 52.0, its highest reading since July 2023, and up from December’s 50.1.

The index ranges between 0 and 100, with a reading of 50.0 representing growth neutral. Meanwhile, one-third of rural bank CEOs report their local economies are in a recession. Additionally, Iowa experienced an increase in exports. 

Other highlights of the report include:

• Almost one in four bankers, or 23.1%, support reducing short-term interest rates by .25% at the Federal Reserve’s interest rate meeting on Jan. 27-28.
• The farm equipment sales index sank below growth neutral for the 29th straight month.
• According to trade data from the International Trade Association, regional exports of agriculture goods and livestock for the first 10 months of 2025, compared to the same period in 2024, fell from $9.9 billion in 2024 to $9.7 billion in 2025, for a decline of 2.4%.
• Regarding President Donald Trump’s imposition of tariffs, almost four of 10 of bankers, or 38.4%, have supported pulling back on tariffs.

“More than one of three bankers, or 34.7%, indicated that their local economy was currently in a recession. Another 26.9% expect their local economy to experience recession conditions in the first half of 2026,” Ernie Goss, Jack A. MacAllister chair in regional economics at Creighton University, said in a news release.

What bankers are saying

Jim Eckert, executive vice president and trust officer of Anchor State Bank in Anchor, Ill., said, “We are still dry in Central Illinois. We probably have sufficient moisture to plant 2026 crops but will need timely rains as subsoil is depleted.”

The Federal Reserve’s interest rate setting committee meets Jan. 27-28 to consider changing rates. Almost one in four bankers, or 23.1%, recommend reducing short-term interest rates by .25%. Approximately 73.1% advocate no change, while the remaining 3.8% support a rate increase.  

Jeffrey Gerhart, former chairman of the Independent Community Bankers Association said, “Interest rate changes by the Fed should pause for the time being. The lag is ‘long and variable,’ meaning policymakers must act with foresight. The economy’s response isn’t immediate, making it challenging to perfectly time monetary policy.”

Farming and ranchland prices: After rising above growth neutral in December, the farm and ranchland index fell below the threshold for January with an index of 46.0, which was down from 52.5. According to trade data from the ITA, regional exports of agriculture goods and livestock for the first 10 months of 2025, compared to the same period in 2024, fell from $9.9 billion in 2024 to $9.7 billion in 2025 for a decline of 2.4%.

Farm equipment sales: The farm equipment sales index sank to a very weak 18.8 but was up from December’s 15.0. “This is the 29th straight month that the index has fallen below growth neutral. Lower interest rates and the impending $12 billion of federal farm support have yet to stimulate farm equipment purchases,” Goss said.

Banking: The January loan volume index dropped to a solid 62.0 from December’s 71.4. The checking deposit index fell to 66.0 from 69.0 in December. The region’s index for certificates of deposits improved to 54.0 from 52.4 in December.  

Hiring: The new hiring index for January rose to 50.0 from December’s 45.0. “Job gains for non-farm rural employers have been soft for the last several months,” said Goss. 

Confidence: Rural bankers remain pessimistic about economic growth for their area over the next six months. The January confidence index rose to 44.0, its highest reading since February 2023, and up from 40.9 in December. “Despite $12 billion of federal farm support, weak grain prices and negative farm cash flows, combined with tariff retaliation concerns, continue to weigh on banker confidence,” said Goss.

Home and retail sales: January home sales increased to a weak 48.1 from December’s 42.9. Regional retail sales sank to 48.1 from 54.8 in December.

Iowa: January’s index for the state climbed to 52.7 from 47.6 in December. Iowa’s farm and ranchland price index for January sank to 46.1 from 51.3. Iowa’s new hiring index for January increased to 49.0 from December’s 43.7. According to the latest trade data from the ITA, Iowa exports of agriculture goods and livestock for the first 10 months of 2025 stood at $1.6 billion, compared to $1.4 billion for the same period in 2024, for a 34.7% increase.

The survey represents an early snapshot of the economy of rural agriculture- and energy-dependent portions of the nation. The Rural Mainstreet Index 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.