Farm woes, tariffs trouble regional economy; ND bucks trend with manufacturing exports

Low commodity prices and Trump administration tariffs are continuing to lead to a bearish economic outlook among rural bankers in the Midwest and Plains. Meanwhile, job losses and inflation are still troubling supply managers in the region.

The overall index for Creighton University's Rural Mainstreet survey in July slipped to 50.6 from June’s 51.9, though it was only the second time since July-August 2023 that it was above growth-neutral for two straight months. Any readings above 50 on the index that ranges from 0 to 100 suggests economic growth in the months ahead, with readings below 50 indicating decline.

One in five bankers who responded to the survey named tariffs as the top economic threat, while about 3 in 4 identified low commodity prices as their biggest concern.

“Until ag commodity prices move to above breakeven, especially for corn and soybeans, I will continue in my bearish outlook for our 100% ag-dependent local economy here in west central Illinois,” said Jeff Bonnett, president of Havana National Bank in Havana, Illinois.

Creighton's Mid-America Business Conditions survey in July sank below growth-neutral after a six-month stretch above the mark — from 50.7 in June to 49.4 last month.

“Creighton’s latest survey continues to reflect job losses across the region, accompanied by elevated wholesale inflation,” said university economist Ernie Goss, who oversees both surveys. “Supply managers expressed growing concern that rising tariffs could further accelerate inflationary pressures. Despite these concerns, only 6.7% of surveyed supply managers reported shifting purchases from international to domestic suppliers in response to the tariffs.”

The Rural Mainstreet survey's confidence index, which looks ahead six months, declined from 37 to 36. The Mid-America survey's confidence index also dropped, from 50 to 42.6.

“Concerns regarding tariffs and slowing new orders pushed supply managers’ expectations lower," Goss said. "Only 1 in 6 supply managers expect rising economic conditions for their firm over the next six months.”

The Rural Mainstreet survey measures rural bankers in Colorado, Illinois, Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota, South Dakota and Wyoming. The Mid-America Business Conditions survey measures supply managers in Arkansas, Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota, Oklahoma and South Dakota. Both serve as economic indicators for the region.

North Dakota data

North Dakota's overall index in the July Mid-America survey was above growth-neutral for a 13th consecutive month, at 52.2, up from 52 the previous month. Components were: new orders at 45.7, production or sales at 50.8, delivery lead time at 59.4, employment at 50.0 and inventories at 55.0.

North Dakota's manufacturing sector exported $2.5 billion in goods for the first five months of 2025, compared to $1.8 billion for the same period in 2024, for a 42.6% gain, according to U.S. International Trade Administration data. Exports regionwide were down 4.7%.

North Dakota's overall index in the Rural Mainstreet survey dipped from 53.5 in June to 52.2 last month. The state’s farmland price index increased to 46.8 from June’s 43.6. The state’s new hiring index fell to 48.3 from 55.3 the previous month.

North Dakota exports of agriculture goods and livestock for the first five months of 2025, compared to the same period in 2024, fell by $19.8 million for a decline of 5%, according to ITA data. The regional drop was 14.8%. Mexico was the top destination for state ag exports, accounting for 51.5%.

The full Rural Mainstreet report is at https://bit.ly/407AAGn. The full Mid-America report is at bit.ly/3SavggB.

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