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OMAHA — Rural Nebraska and much of the Midwest are feeling the squeeze again. The region’s farm-based economy has slipped to its weakest level in five years, according to Creighton University’s October Rural Mainstreet Index.
The survey of small-town bankers across 10 states — including Nebraska, Iowa and the Dakotas — shows that low grain prices, high interest rates and slipping land values are taking a toll. The overall index dropped to 34.6 in October, down from 38.5 a month earlier. Anything below 50 signals economic decline.
“Grain prices have been stubbornly low, and that’s dampening spending in rural communities,” said Ernie Goss, economist at Creighton University. “While tariffs and trade uncertainty are creating volatility, nearly three-fourths of rural bankers still believe President Trump’s approach to China is about right.”
Farm Finances Under Pressure
Farmland values continued to slip, marking the 17th time in the last 18 months they’ve fallen below the growth mark. Bankers blamed high input costs, weaker commodity prices and interest rates that make borrowing more expensive. Farm loan delinquencies also nudged higher this fall — up from 1.1% in June to 1.6% in October.
“The ag economy is in a tough stretch,” said Jeff Bonnett of Havana National Bank in Illinois. “Farmers’ equity and borrowing capacity are getting tighter with every season.”
Equipment Sales Stay Weak
Rural machinery dealers are also feeling the pinch. Farm equipment sales have now been below growth neutral for 26 straight months. “High costs and market uncertainty are keeping producers from making big purchases,” Goss said.
Exports to China Plummet
One of the biggest hits has come from overseas. Agricultural exports to China from the 10-state region dropped nearly 86% this year compared with 2024. Nebraska’s exports to China alone fell 92%, even as overall farm exports from the state rose nearly 48%.
Most rural bankers — about 85% — say they support President Trump’s proposed $10 billion in federal aid to help farmers weather the downturn. Still, some would prefer lasting trade solutions over stopgap aid.
“I’d rather see a deal with China than another round of relief checks,” said Terry Engelken of Washington State Bank in Iowa.
Nebraska Holding Steady
Nebraska’s Rural Mainstreet Index ticked up slightly to 39.6, buoyed by stronger exports to other countries and stable hiring.
Land prices also inched higher, and the state’s overall farm economy remains stronger than many of its neighbors.
Even so, small-town bankers say rural communities are feeling the slowdown. Home and retail sales both fell in October, and confidence about the next six months remains low.
About the Survey
The Creighton University Rural Mainstreet Index has tracked the health of smalltown economies across the Midwest since 2006. It surveys about 200 community bank CEOs in 10 states, focusing on regions dependent on farming and energy.
