(NAFB) New survey results show the rural economy continues to struggle, with weak commodity prices, rising input costs, and ongoing uncertainty surrounding trade policy weighing heavily on farmers and ranchers. Creighton University economist Ernie Goss says rural bankers across a 10-state region remain concerned about the outlook. He explains what the latest Rural Mainstreet Index reveals.
“Most of the scores that we calculate here range between 0 and 100, with 50 being growth neutral, and the index is well below growth neutral. In fact, for the fifth time in the past six months, it was below growth neutral, sort of like your, at least my, chemistry score in high school – well below growth neutral. It was around 42 for the month of July, and of course that’s not good. It’s no secret here that the farming and ranching across the U.S. is not doing well right now, and we can place the blame to some degree on tariffs and other factors at the international level.”
Goss says it’s not just one issue dragging down the rural economy. Instead, producers are being squeezed from both sides of the balance sheet.
“It’s the prices of the commodities which are down and not strong, and that in this area of the country that’s chiefly of wheat, corn, and soybean. On the flip side, their costs are rising. That would be, for example, fertilizer, diesel fuel, and other inputs. So, the rancher and the farmer is being squeezed, and I would say a higher proportion of the farmers and ranchers in our area, the 10-state area, stretching from west to Colorado and Wyoming and east to Illinois. So, we’re talking about a big stretch of the agricultural sector of the U.S. economy, and of course that’s really hitting home and we’re seeing some real pain out there, and it’s been going on since 2022.”
Despite the overall downturn, there was one area that showed some resilience. Goss says farmland values have remained relatively stable as producers continue to focus on the long-term outlook.
That optimism, however, isn’t translating into major equipment purchases. High costs and tight margins are keeping many producers on the sidelines.
“I mean, the factors disincentivizing farmers and ranchers out there is just too strong. In other words, the price of equipment and we’re talking about not only other tariffs on U.S. retaliation for our higher tariffs, we’re also talking about tariffs, for example, on steel and aluminum coming in from Canada. Of course, that steel and aluminum goes into the production of ag equipment, for example, John Deere and that, of course, increases the price of equipment and on the flip side, the farmers sitting there trying to look, looking at the intermediate to short term and saying now’s not the time and they’re getting very conservative and rightfully so in terms of spending money on lots of things and some of it we’re talking about cutting back on fertilizer, for example. Of course, moving forward, fertilizer costs are rising, and a lot of what we’re seeing now is some real issues with that one factor right there.”
Even with those financial pressures, rural banks aren’t seeing the kind of credit problems that defined the farm crisis of the 1980s.
“Well, I’ll compare this to the 80s, and I wasn’t here in the 80s, and we didn’t conduct the surveys, but that was a tough time when the bankers got too aggressive in lending, and farmers got too aggressive in borrowing. That’s not the case now. Right now, the bankers have been pretty prudent lending, and farmers, likewise, have been very prudent borrowing. So, while the economic conditions are not good, for example, we ask questions about credit out there, and there’s credit is tightened a bit, and credit standards have tightened a bit, but when you look at farm loan delinquencies, not so much. We’re still, we look to ask about the last six months, not much movement there in terms of delinquencies. Now, bankruptcies have risen, but not to the extent you’d expect based upon our survey.”
Still, bankers remain cautious about what’s ahead. Goss says uncertainty surrounding global markets and trade continues to weigh on confidence.
“I mean, the President’s making nightly and daily and some weekly or monthly announcements about what’s going on in the Strait of Hormuz or with Iran, that war, and that has an impact on confidence because, again, that increases the cost for fertilizer, for example, moving through the Strait. That’s also increasing the cost of diesel fuel. And it’s also raising real problems with some of our trading partners because our farmers are just too darn productive. There’s too much production in agriculture and for the domestic market. In other words, we have to have sales abroad, particularly, say, Mexico and Canada. We still have yet to recover those lost sales to China. Now, for ‘26 exports to China of agricultural livestock, they have gone up from ‘25, but 2025 was such a bad year. So, sometimes the retaliation is what’s hurting the farmers, and the bankers are reporting on that.”
Professor Ernie Goss adds that a new five-year Farm Bill could provide farmers with more certainty as they make long-term business decisions. While government assistance can provide short-term relief, he says stronger export demand and improved profitability will ultimately be needed to strengthen the rural economy. Goss is an economics specialist with Creighton University, which recently released data from its July Rural Mainstreet Index survey.
