Bank CEOs in rural communities continued to lack optimism this month due to a number of factors, according to a survey from Creighton University.
The Rural Mainstreet Index fell below the growth-neutral score of 50 for the 17th time in the past 18 months, to 38.0 from 42.3 in January. The index for farmland prices fell for the ninth time in the past 10 months, to 40.0, its lowest mark since October and down two points from January.
Rural bankers continued to lack optimism that the economy will grow over the next six months. February’s confidence index fell to 40.0 from 42.3 in January. “Weak grain prices and negative farm cash flows, combined with downturns in farm equipment sales over the past several months, continued to push banker confidence below growth neutral,” said Ernie Goss, chair in regional economics at Creighton University’s Heider College of Business.
The index for farm equipment sales increased to a still-weak 18.2 from 17.4 in January, the 19th straight month it has fallen under 50. Goss attributed the lack of farm equipment sales to high input costs, tighter credit conditions and lackluster farm grain prices.
“The economic outlook for grain farmers remained weak for 2025,” he said. “However, grain prices have recently improved, but not enough for profitability for many producers. On the other hand, regional livestock producers continue to experience solid prices with only 9.3 percent of bankers expecting negative cash flow for ranchers in 2025.”
Seventy-one percent of bankers expect livestock ranchers will see positive cash flow or net income this year. Nearly half expect grain farmers will see negative cash flow in 2025, higher than the 54.2 percent who forecasted farmers to break even or earn a profit. Farm equipment sales fell for the 18th straight month. Regional retail sales fell to their lowest level since the pandemic started.
Regional exports of agriculture goods and livestock increased $747.8 million or 6.1 percent last year, according to the International Trade Association. Only 9 percent of bankers anticipate positive outcomes from any tariffs from the Trump administration. Mexico was the top destination for ag exports last year, having 47.7 percent of regional agriculture and livestock exports.
The survey covered regions of 10 states dependent on agriculture and/or energy: Colorado, Illinois, Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota, South Dakota and Wyoming.
Other report findings included:
- February’s loan volume index increased to 60.4 from 60.0 the previous month. The checking deposit index increased to 58.7 from 48.0 in January. The index for certificates of deposits and other savings instruments increased to 62.5 from 58.0 in January.
- The new hiring index fell to 43.5 from 47.9 in January.
- The index for home sales dropped to 37.0 from 40.0. Regional retail sales fell to 28.3 from 44.0 in January.