For the 11th straight month, the Creighton University Rural Mainstreet Index (RMI) remained above growth neutral, according to the monthly survey of bank CEOs in rural areas of a 10-state region dependent on agriculture and/or energy. The region’s overall reading for October rose to 66.1 from September’s healthy 62.5. The index ranges between 0 and 100 with a reading of 50.0 representing growth neutral.
“Solid grain prices, the Federal Reserve’s record-low interest rates, and growing exports have underpinned the rural mainstreet economy. USDA data show that 2021 year-to-date agriculture exports are more than 25.4% above that for the same period in 2020. This has been an important factor supporting the rural mainstreet economy,” says Creighton University’s Dr. Ernie Goss, who conducts the survey.
Farming and ranching: The region’s farmland price index slid to a still very strong 81.5 from September’s record high 85.2. October’s reading represented the 14th straight month that the index has moved above growth neutral.
The October farm equipment-sales index slipped to a strong 64.8 from 66.0 in September. Readings over the last several months represent the strongest consistent growth since 2012.
Bank CEOs indicated that congestion at domestic transportation hubs represented the greatest supply chain disruption for farmers.
More than eight of 10, or 82.1%, of bankers indicated farmers in their area were in solid cash position with little need for borrowing. The remaining 17.9% of bankers reported farmer cash positions little changed from past years.
However, Steve Simon, CEO of South Story Bank in Slater-Huxley, Iowa said, “Year-end borrowing as farmers look to pre-pay rising input costs.”
Confidence: The confidence index, which reflects bank CEO expectations for the economy six months out sank for the fourth straight month to 51.8, its lowest level since November of last year, and down from September’s much stronger 65.4.
The survey represents an early snapshot of the economy of rural agriculturally and energy-dependent portions of the nation. The Rural Mainstreet Index (RMI) is a unique index covering 10 regional states, focusing on approximately 200 rural communities with an average population of 1,300. It gives the most current real-time analysis of the rural economy.