Low commodity prices, high input expenses weakening rural economy

Low commodity prices and high input expenses continue to constrain the regional economy, according to Creighton University’s May rural mainstreet index. .The index, which tracks the sentiments of bank CEOs in rural areas of a 10-state region, fell to 45.7 from 47.9 in April, its 15th month of being below 50 since the start of 2025. Any reading above that signals positive sentiments. Forty-eight percent of bank CEOs said financial conditions for farmers and ranchers weakened from 2025-26. More than half listed weak grain prices as the top factor holding back farm financial conditions. Corn prices have fallen to near $4 per bushel, 54 percent from their pandemic peak of more than $7. Soybeans have fallen 58 percent, to under $10.00 per bushel from more than $15 highs. Input expenses are higher than general inflation rates amid energy costs, supply limitations and trade tariffs. May’s economic confidence index fell to 34.8 from 39.1 in April. “In spite of the potential for year-round E-15 ethanol sales, weak grain prices, higher input prices and expected negative farm cash flows continue to weigh on banker confidence,” said Ernie Goss, chair in regional economics at Creighton University.The agriculture equipment sales index was below 50 for the 33rd straight month. The region’s farm and ranchland price index increased this month after three straight months of falling values, to 50.1 from 48.0. “Though farm and ranchland values have been holding up much better than farm income, weak farm income, lower farm liquidity and tougher credit standards have restrained farmland values,” Goss said.This month’s farm equipment sales index fell to 18.2 from 26.1 in April, its 33rd straight month of being under 50. “The war in Iran has added volatility to an already-pressured agricultural sector, with rising input costs squeezing farmer operating margins, dampening equipment sales and reshaping planting decisions heading into the season,” Goss added. The survey includes Colorado, Illinois, Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota, South Dakota and Wyoming. Other May report findings included:Regional exports of ag goods and livestock increased 7.5 percent to $2.93 billion in the first quarter from the same time in 2025, according to the International Trade Association.The loan volume index increased to 67.4 from 65.2 in April, while the checking deposit index dropped to 54.3 from 60.9 in April. The region’s certificates of deposits index increased to 60.9 from 56.5 the previous month.The new hiring index fell to 43.5 from 50.0 last month amid little gain in the rural job market for farms, ranches and non-farm rural employers. May’s home sales index increased to 47.8 from 45.8 in April. The index tracking regional retail sales increased to 41.3 from 39.1.