Bankers in Iowa and nine other states who responded to the latest “Rural Mainstreet” survey predict many Midwest grain farmers will have more expenses than profits this year.
“It’s all about those two words that we always use: supply and demand. And I think in this case it’s too much supply for most of the grain products out there,” said Creighton University economist Ernie Goss, who conducts the survey. “The bankers expect one-fifth of the grain farmers to experience negative cash flow — of course that’s not good, negative income.”
The U.S.D.A. predicts Iowa farmers will harvest the largest ever corn crop this fall and that bumper crop means lower prices — projected to be around $3.60 per bushel. Goss said there are other troublesome economic signals in the farm economy.
“Farmland prices are down for the month and farm equipment sales down for the 24th straight month,” Goss said. “…Iowa and Nebraska had the worst economic performance from the fourth quarter of 2024 to the first quarter of 2025 — the worst in the nation — and that’s all about agriculture.”
Goss said urban areas are doing much better, but Midwest economies rely heavily on the performance of the ag sector. A weaker U.S. dollar may eventually boost overseas grain sales, according to Goss, and he said there may at least be a short term break for borrowers if the Federal Reserve cuts interest rates in September.
