Rural Mainstreet Economy: Two-Thirds of Bankers Expect 2025 Farm Income Decline

For the 18^th time in the past 19 months (March 20, 2025), the overall Rural Mainstreet Index (RMI) sank below the 50.0 reading in March, according to the monthly survey of bank CEOs in rural areas of a 10-state region dependent on agriculture and/or energy.

Overall: The region’s overall reading for March increased to a weak 41.1 from February’s 38.0. The index ranges between 0 and 100, with a reading of 50.0 representing growth neutral.

Jeff Bonnett, President of Havana National Bank in Havana, Ill., said, “It appears that our farm operators should brace for yet another decrease in gross farm income, and I have not yet heard anyone cheering about ‘cheaper’ input prices for 2025.”

“The economic outlook for 2025 farm income remains weak according to bank CEOs. However, farm commodity prices have recently improved, but not enough for profitability among a high share of producers,” said Ernie Goss, PhD, Jack A. MacAllister Chair in Regional Economics at Creighton University’s Heider College of Business.

Approximately 62.9% of bankers expect 2025 farm income to be down from 2024’s weak farm income. Only 3.7% of bank CEOs predict 2025 farm income to expand from 2024’s level.

March 2025 Survey Results at-a-Glance:

• The overall Rural Mainstreet index fell below growth neutral for the 18^th time in the past 19 months.
• For the 10^th time in the past 11 months, farmland prices sank.
• In terms of 2025 farm income, compared to 2024 farm income, only 3.7% of bankers expect an increase, while 62.9% predict a decline.
• Farm equipment sales dropped for the 19^th straight month.
• Only 7.5% of bank CEOs recommend returning to January 2025 tariff levels.
• According to trade data from the International Trade Association (ITA), regional exports of agriculture goods and livestock for the first month of 2025, compared to the first month of 2024, fell from $1.1 billion in 2024 to $964.3 million in 2025 for a decline of 13.9%.
• Mexico began 2025 as the top destination for ag exports, accounting for 44.8% of total regional agriculture and livestock exports.
• Despite weakness on the farm, solid job gains were recorded for the non-farm Rural Mainstreet Economy.

Farming and ranch land prices: For the 10^th time in the past 11 months, farmland prices were below growth neutral. The region’s farmland price index fell to 38.9 from 40.0 in February. “Elevated interest rates and higher input costs, along with below breakeven prices for a high share of grain farmers in the region, have put downward pressure on ag land prices,” said Goss.

The overwhelming majority, or 85.0% of bankers support the continuation of the 2017 tax cuts on individuals and corporations with 25.7% of backers pushing for a cut in the corporate income tax rate from the current 21% to 15%.

According to trade data from the International Trade Association (ITA), regional exports of agriculture goods and livestock for the first month of 2025, compared to the first month of 2024, fell from $1.1 billion in 2024 to $964.3 million in 2025 for a decline of 13.9%. Mexico began 2025 as the top destination for ag exports, accounting for 44.8% of total regional agriculture and livestock exports.

Only 7.5% of bankers support returning to January 2025 tariff levels on Canada, China and Mexico. Approximately 70.4% of bankers support the Administration taking a more flexible approach to tariffs.

Farm equipment sales: The farm equipment sales index rose to a very weak 20.8 from February’s 18.2. “This is the 19^th straight month that the index has fallen below growth neutral. High input prices, tighter credit conditions and weak farm grain prices are having a negative impact on the purchases of farm equipment,” said Goss.

Banking: The March loan volume index increased to 77.8 from February’s 60.4. The checking deposit index plummeted to 50.0 from 58.7 in February. The index for certificates of deposits (CDs) and other savings instruments dropped to 55.6 from 62.5 in February. Federal Reserve interest rate policies have boosted CD purchases above growth neutral for 28 straight months.

Hiring: The new hiring index for March rose to 53.7 from February’s 43.5. Job gains for non-farm employers more than offset weakness among farm producers.

Confidence: Rural bankers remain pessimistic about economic growth for their area over the next six months. The March confidence index sank to 30.4 from February’s 40.0. “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 lower,” said Goss.

Home and retail sales: Home sales remained soft with a March reading of 42.6, up from February’s 40.0. Regional retail sales rebounded but remained extremely weak, much like the nation, with an index of 40.4, up from 28.3 in February.

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.

Below are the state reports:

South Dakota: The March RMI for South Dakota increased to 42.3 from 31.4 in February. The state’s farmland price index dipped to 37.5 from 37.7 in February. South Dakota’s March new hiring index expanded to 50.5 from February’s 40.3. According to trade data from the International Trade Association, South Dakota exports of agriculture goods and livestock for the first month of 2025, compared to January 2024, expanded by $18.5 million for an expansion of 239.6%. Mexico was the top destination to begin 2025, accounting for 88.7% of January South Dakota agriculture and livestock exports.

Colorado: The state’s Rural Mainstreet Index (RMI) for March sank to 43.6 from 66.3 in February. The farmland and ranchland price index for March dropped to 39.5 from February’s 47.3. The state’s new hiring index increased slightly to 52.9 from 52.5 in February. According to trade data from the International Trade Association, Colorado exports of agriculture goods and livestock for the first month of 2025, compared to January 2024, rose by $26.0 million for a 100.6% gain. Spain was the top destination to begin 2025, accounting for 39.6% of January Colorado agriculture and livestock exports.

Illinois: The state’s March Rural Mainstreet Index (RMI) slumped to 30.4 from February’s 34.2. The farmland price index declined to 35.8 from February’s 42.5. The state’s new hiring index improved to 48.3 from 42.5 in February. According to trade data from the International Trade Association, Illinois exports of agriculture goods and livestock for the first month of 2025, compared to January 2024, fell by $55.7 million for a decline of 13.4%. China was the top destination to begin 2025, accounting for 25.2% of January Illinois agriculture and livestock exports.

Iowa: March’s RMI for the state improved to a weak 39.2 from 32.8 in February. Iowa’s farmland price index for March sank to 33.6 from 38.1 in February. Iowa’s new hiring index for March soared to 55.7 from February’s 40.8. According to trade data from the International Trade Association, Iowa exports of agriculture goods and livestock for the first month of 2025, compared to January 2024, fell by $62.2 million for a decline of 37.3%. Mexico was the top destination to begin 2025, accounting for 77.4% of January Iowa agriculture and livestock exports.

Kansas: The Kansas RMI for March decreased slightly to 36.5 from February’s 36.8. The state’s farmland price index dropped to 32.6 from 39.3 in February. The new hiring index for Kansas increased to 44.5 from 42.2 in February. According to trade data from the International Trade Association, Kansas exports of agriculture goods and livestock for the first month of 2025, compared to January 2024, fell by $22.0 million for a decline of 20.9%. Mexico was the top destination to begin 2025, accounting for 83.5% of January Kansas agriculture and livestock exports.

Minnesota: The March RMI for Minnesota plummeted to 46.2 from 62.4 in February. Minnesota’s farmland price index dropped to 40.3 from 46.5 in February. The new hiring index for March rose to 53.9 from February’s 51.2. According to trade data from the International Trade Association, Minnesota exports of agriculture goods and livestock for the first month of 2025, compared to January 2024, fell by $14.8 million for a decline of 16.3%. Mexico was the top destination to begin 2025, accounting for 44.4% of January Minnesota agriculture and livestock exports.

Missouri: The state’s March RMI climbed to 56.2 from 55.2 in February. The farmland price index for March tumbled to 39.3 from February’s 61.5. The state’s new hiring gauge for March plunged to 44.9 from February’s 69.7. According to trade data from the International Trade Association, Missouri exports of agriculture goods and livestock for the first month of 2025, compared to January 2024, fell by $21.7 million for a decline of 23.5%. Mexico was the top destination to begin 2025 accounting, for 85.4% of January Missouri agriculture and livestock exports.

Nebraska: The Nebraska Rural Mainstreet Index for March sank to 32.6 from February’s 37.0. The state’s farmland price index for March fell to 36.4 from February’s 39.3. Nebraska’s new hiring index improved to 49.1 from 42.2 in February. According to trade data from the International Trade Association, Nebraska exports of agriculture goods and livestock for the first month of 2025, compared to January 2024, fell by $10.9 million for a decline of 8.7%. Mexico was the top destination to begin 2025, accounting for 43.0% of January Nebraska agriculture and livestock exports.

North Dakota: North Dakota’s RMI for March dropped to 40.3 from 49.8 in February. The state’s farmland price index slumped to 38.6 from 45.6 in February. The state’s new hiring index expanded to 51.8 from 46.2 in February. According to trade data from the International Trade Association, North Dakota exports of agriculture goods and livestock for the first month of 2025, compared to January 2024, fell by $13.4 million for a decline of 15.1%. Mexico was the top destination to begin 2025, accounting for 43.0% of January North Dakota agriculture and livestock exports.

Wyoming: The March RMI for Wyoming climbed to 46.6 from 34.7 in February. The March farmland and ranchland price index increased to 40.4 from February’s 38.7. Wyoming’s new hiring index climbed to 54.0 from 41.5. According to trade data from the International Trade Association, Wyoming exports of agriculture goods and livestock for the first month of 2025, compared to January 2024, expanded by $0.41 million for a gain of 367.2%. Mexico was the top destination to begin 2025, accounting for 52.6% of January Wyoming agriculture and livestock exports.