A monthly survey of bank CEOs in Iowa and nine other Midwestern states shows a dismal outlook. The Creighton University report shows the February score fell to 38 on a zero-to-100 scale, where 50 is growth neutral.
Creighton Economics Professor Ernie Goss says the new numbers are reminiscent of the COVID-era, and he cites struggling commodity prices as one of the big reasons for the Midwest economy’s continuing slump.
“Agricultural commodity prices, particularly grain, are moving up a bit lately,” Goss says, “but still not as strong as we’d like to see. On the flipside, to give us some good news, livestock is doing somewhat better. When we asked the bankers about looking forward to 2025, they were much more positive about the livestock sector.”
About 71-percent of bankers surveyed expect livestock ranchers to experience positive cash flow or net income in 2025, while nearly half expect grain farmers to experience negative cash flow.
Goss says President Trump’s recently-announced tariffs on products from Canada and Mexico have bankers concerned. Only nine-percent of those surveyed expect positive outcomes from Trump’s tariffs, as Canada and Mexico are major trade partners.
“Retaliation is really a concern among bankers and economists, as well,” he says. “We’re talking about 47-percent of the exports of agricultural and livestock goods coming from this part of the country, 47-percent go to Mexico. So, if you see retaliation there, that would hit the economy really hard.”
Another factor is continuing cases of highly pathogenic avian influenza detected in poultry in Iowa and other parts of the Midwest. Goss says the main impact is in the survey’s confidence index, which sank to a score of 40 this month, down from January’s 42.3.
“We ask each month for the bankers to look forward another six months,” Goss says. “They were pretty darn negative, as you can imagine in Iowa — one of the big producers of eggs and poultry. That’s a big issue, even without any contamination over to livestock.”
Goss says the lack of action on a Farm Bill in Congress is also creating uncertainly among survey respondents across the region.
“There’s so much uncertainty in agriculture and farming,” he said. “We don’t have much positive input from the U.S. federal government. We got a one-year farm bill. We need to see a five-year farm bill and not a one-year farm bill. Each year, we’re getting less and less support from the federal government.”
Goss says farm equipment sales continue to struggle, though February’s mark of 18.2 is actually up from last month’s level of 17.4.
(Mike Peterson, KMA, Shenandoah)