For the seventh time in 2025, the overall Rural Mainstreet Index (RMI) sank below growth neutral 50.0, according to the 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 September fell to 38.5 from 48.1 in August. The index ranges between 0 and 100, with a reading of 50.0 representing growth neutral. The Midwest saw an average 8.86 decline from August to September. In the Month of September compared to 2024 an overall decrease of 31.5 occurred in the industry.

“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 indicated that falling agriculture commodity prices represented the greatest threat to banking operations over the next 12 months,” said Ernie Goss, PhD, Jack A. MacAllister Chair in Regional Economics at Creighton University’s Heider College of Business.

Approximately, three of four bank CEOs reported that tariff increases have had a negative impact on farm operations. 

Farming and Ranch Land Prices

For the 16th time in the past 17 months, farmland prices slumped below growth neutral. The region’s farmland price 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,” said Goss.

According to the USDA data, the 10-state region produced 36.9% of U.S. 2024 agriculture output.

Jim Eckert, Executive VP and Trust Officer of Anchor State Bank in Anchor, Ill., said, “Harvest has just begun in our area of Central Illinois. Few soybeans have been combined, but initial corn indications are that corn crop will not be as good as 2024.”

Terry Engelken, Vice President at Washington State Bank in Washington, Iowa, agreed with Eckert, stating that, “The recent dry weather appears to have lowered the yields expectations for both corn and soybeans.”

Farm 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 that 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,” said Goss.

Banking

The September loan volume index declined to 70.0 from August’s 82.7. The checking deposit index fell to 54.0 from August’s 63.5. The index for certificates of deposits (CDs) and other savings instruments rose to 60.0 from 59.6 in August. Federal Reserve interest rate policies have boosted CD purchases above growth neutral for 34 straight months.

Hiring

The new hiring index for September slumped to 48.0 from August’s 56.0. Job gains for non-farm employers have been very soft for the last several months. Approximately, 92.2% of bankers indicated that the economy is in an economic slowdown.

Confidence

Rural bankers remain pessimistic about economic growth for their area over the next six months. The September confidence index increased to a 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,” said Goss.

Home and Retail Sales

The home sales index decreased slightly to 48.0 from 48.1 in August. Regional retail sales for September were fragile in September with a reading of 34.8, down from 46.2 in August.

The survey represents an early snapshot of the economy of rural agriculturally- and energy-dependent portions of the nation. The Rural Mainstreet Index is a unique index that 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.

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