The Rural Mainstreet Index is back in growth neutral territory after months of lagging performance. Bank executives point to improvements in federal policy, but emphasize that there are still big problems in the rural economy, namely another month of lowered farm equipment sales, export declines and weak grain prices. 

The index, which is a monthly survey of bank CEOs in rural areas of a 10-state region dependent on agriculture and/or energy, climbed above growth neutral for the second time in 2025. The region’s overall reading for December increased to 50.1, its highest reading since July, and was up from November’s 44.0. The index ranges between 0 and 100, with a reading of 50.0 representing growth neutral.

“Weak agriculture commodity prices and high input costs for grain producers continue to restrain economic activity in the 10-state region,” Ernie Goss, Jack A. MacAllister Chair in Regional Economics at Creighton University, said in a news release.

Highlights include:

• Half of bank CEOs identified the reduction of tariffs and trade restrictions as the most effective policy change needed to boost farm income.
• For only the second time in the past 20 months, farmland prices expanded above growth neutral to their highest level since April 2024.  
• For the 28th straight month, the farm equipment sales index slumped below growth neutral.
• According to the most recent trade data from the International Trade Association, regional exports of agriculture goods and livestock for 2025, compared to the same period in 2024, fell by 3.6%. 
• For the first nine months of 2025, compared to the same period in 2024, exports of agriculture and livestock to China plummeted by 87.6%. 

Bank CEOs had this to say about the rural Midwest economy:

• Jim Eckert, executive vice president and trust officer of Anchor State Bank in Anchor, Ill., said, “Low grain prices and higher input cost continue to plague our area farmers. The Trump $12 billion payment to producers will help but is not a cure.”
• Jeffrey Gerhart, former chairman of the Independent Community Bankers Association, said, “Tariffs continue to be a negative factor for the farming sector. We’ve worked hard to build good trading relationships with our trading partners across the globe, only to see it torn apart in less than 12 months.”
• Gregory R. Hohl, CEO and board director of Wahoo State Bank in Wahoo, Neb., said, “Interest rates are definitely impacting housing starts and sales along with higher insurance premiums and property tax obligations. This would be a third year of shortfalls with our farmers and does not bode well for many to continue.”

Farming and ranchland prices: For only the second time in the past 20 months, farmland prices expanded above growth neutral. The region’s farmland price index improved to 52.5, its highest level since April 2024, and was up from 43.2 in November.  

Bankers reported that farm loan delinquencies expanded by only 1.6% over the past six months. “As the farm economy has weakened significantly over the past two years, farm loan delinquencies have remained virtually flat. Even so, one-third of bankers indicated that their banks had tightened credit standards,” Goss said.

According to trade data from the ITA, regional exports of agriculture goods and livestock for the first nine months of 2025, compared to the same period in 2024, fell from $8.7 billion in 2024 to $8.4 billion in 2025, a decline of 3.6%. Exports of agriculture and livestock for the nine-month period to the region’s major trading partner, Mexico, advanced by 2.1%, while the export of agriculture and livestock to China plummeted by 87.6%. 

Iowa: December’s index reading for the state increased to 47.6 from 47.0 in November. Iowa’s farm and ranchland price index for December advanced to 51.3 from November’s 45.2. Iowa’s new hiring index for December sank to 43.7 from November’s 51.8. Iowa’s year-to-date exports of agricultural goods and livestock reached $1.4 billion in 2025, up 30.5% from $1.1 billion during the same period in 2024, according to the latest data from the ITA. 

Farm equipment sales: The farm equipment sales index slightly declined to a very weak 15.0 from November’s 15.1.

“This is the 28th straight month that the index has fallen below growth neutral. Lower interest rates have yet to stimulate farm equipment purchases,” Goss said.

Banking: The December loan volume index advanced to 71.4 from November’s 64.6. The checking deposit index improved to 69.0 from 58.3 in November. The region’s index for certificates of deposits improved to 52.4 from November’s 47.9. The Federal Reserve’s recent interest rate cuts have weakened CD purchases with the index standing at 60.0 three months earlier.

Hiring: The new hiring index for December sank to 45.0 from November’s 49.5. Job gains for non-farm employers have been soft for the past several months.

Confidence: Rural bankers remain pessimistic about economic growth for their area over the next six months. The December confidence index rose to 40.9, its highest reading since January of this year, and was up from 32.0 in November. 

“Weak grain prices and negative farm cash flows, combined with tariff retaliation concerns, continue to weigh on banker confidence,” Goss said.

Home and retail sales: December home sales slumped to a weak 42.9 from November’s 43.8. Regional retail sales rebounded to a solid 54.8 from 41.7 in November.

The survey represents an early snapshot of the economy of rural agriculturally- and energy-dependent portions of the nation. The index covers 10 states, focusing on approximately 200 rural communities with an average population of 1,300. 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.