Rural Bank CEOs Highlight Impact of Weak Grain Prices on Farmers
The financial health of farmers in a 10-state region is being significantly impacted by weak grain prices, according to over half of rural bank CEOs surveyed in the May Rural Mainstreet Index. This index, which provides insights into the economic conditions of agriculture and energy-reliant rural communities, is a collaborative effort by Ernie Goss, an economist and professor at Creighton University, and Bill McQuillan, a former chairman of the Independent Community Bankers of America.
Nebraska’s overall index showed a decline, falling from 53.9 in April to 51.4 in May. Regionally, the index dropped to 45.7 from 47.9, marking the fourth consecutive month it has remained below the growth-neutral threshold of 50.
The imposition of tariffs by the Trump administration has led to retaliatory measures by trading partners, including new tariffs from China on U.S. products, affecting Nebraska in particular. “We’re seeing some restrictions on trade coming in. For example, steel and aluminum coming in from Canada. That has some negative impacts on the agricultural economy,” Goss stated. Agricultural equipment sales have declined for 33 straight months, indicating a troubling trend.
Nebraska’s hiring index also saw a drop, decreasing from 54.8 in April to 47.7 in May. A significant factor in this decline is the closure of the Tyson plant in Lexington, which resulted in the loss of 3,200 jobs. “We’re now coming up with closures of some other food processing plants. And that’s very important for agriculture and very important for the economy of Nebraska,” Goss commented, noting the negative spillover effects on the state’s economy.
Another concern is the substantial fall in Nebraska’s agricultural exports, which decreased by 16.6% to $271.7 million in the first quarter of 2026 compared to the previous year, despite a 7.5% increase in exports across the region. This decline is attributed to challenges in international competition, particularly in food processing.
On a positive note, Nebraska’s unemployment rate remains steady at 3%, lower than the national rate of 4.3%. Additionally, nearly 75% of bankers surveyed support keeping Federal Reserve interest rates steady, citing high inflationary pressures as a reason against rate cuts, even as the national job market remains robust with the addition of 172,000 jobs in May.
Despite challenges, Nebraska’s farm and ranchland price index decreased slightly to 51.8 from 54.4 in April. However, the broader 10-state area’s farmland price index rose to 50.1 in May, ending a three-month decline. Goss believes this recovery is not just a temporary blip, emphasizing farmers’ willingness to invest in land long-term. He noted, “Livestock prices have been holding up. But unfortunately, there’s not a lot of cattle out there.”
Looking forward, the resolution of supply chain disruptions and reduction in agricultural input costs are seen as crucial for relief. Goss warned of ongoing inflationary pressures, stating, “There’s too much inflationary pressure built into the pipeline right now. Fertilizer costs are going to cut into the farmers’ cash flow.”
The Rural Mainstreet Index, which surveys approximately 200 bank CEOs from rural communities in Nebraska, Iowa, Illinois, Kansas, Minnesota, Missouri, Colorado, Wyoming, North Dakota, and South Dakota, provides valuable insights into the economic pulse of areas with average populations of about 1,300.
