Rural Bankers Warn of Weakening Agricultural Economy

Rural bankers are growing increasingly worried about the agricultural economy as rising fuel and fertilizer costs squeeze farmers. Creighton University’s Rural Mainstreet Index dropped to 44.7 in September, down from 50.3 in August, signaling economic contraction in rural areas. Economist Ernie Goss noted that higher production expenses are overshadowing some of the optimism from stronger grain prices.

Bankers surveyed identified fertilizer and fuel costs as major challenges. About 53% cited fertilizer costs as a significant concern, while 47% pointed to higher fuel prices. The agricultural equipment sector is also struggling, with the farm equipment sales index falling to 25, marking the 37th straight month below the growth-neutral level.

Trade policy remains a concern, with 79% of bankers saying tariffs are negatively impacting agriculture and livestock economies. The six-month economic confidence index dropped to 26.3, reflecting cautious expectations for the rural economy. Producers are now facing elevated operating expenses as they make key decisions heading into the final months of the year.