From Creighton's Heider College of Business, July 15:
July Survey Results at a Glance:
- Overall index remains at a high level indicating strong growth for the month.
- Despite recent solid job gains, U.S. Bureau of Labor Statistics data indicate that the Rural Mainstreet nonfarm employment remains 1.3%, below its pre-COVID-19 level.
- In three states, Minnesota, Nebraska, and South Dakota, current nonfarm employment exceeds pre-pandemic levels.
- On average bank CEO’s estimated farmland price growth for the previous 12 months at 5.8%, but project growth at only 2.4% for the next 12 months.
- Almost half of bankers reported damaging drought conditions for farmers in their area.
OMAHA, Neb. (July 15, 2021) – For the eighth 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.
Overall: The overall index for July fell to a healthy 65.6 from June’s strong 70.0. The index ranges between 0 and 100 with a reading of 50.0 representing growth neutral.
Approximately, 31.3% of bank CEOs reported that their local economy expanded between June and July.
“Solid, but somewhat weaker, grain prices, along with the Federal Reserve’s record-low interest rates, and growing exports have underpinned the Rural Mainstreet Economy. Even so, current rural employment remains below pre-pandemic levels,” said Ernie Goss, PhD, Jack A. MacAllister Chair in Regional Economics at Creighton University’s Heider College of Business.
Farming and ranching: For a 10th straight month, the farmland price index advanced significantly above growth neutral. The July reading fell to a strong 71.0 from June’s 75.9. This is first time since 2012-2013 that Creighton’s survey has recorded 10 straight months of farmland prices above growth neutral.
This month bankers were asked to estimate farmland price growth for the previous 12 months and for the next 12 months. On average bank CEO’s estimated farmland price growth for the previous 12 months at 5.8%, but projected growth at only 2.4% for the next 12 months.
Approximately 46.9% of bankers reported damaging drought conditions for farmers in their area. However, there was significant variation among reports. For example, Steve Simon CEO of South Story Bank and Trust in Huxley, Iowa, reported, “Although still under drought conditions, central Iowa has received some timely, much needed rain.”
The July farm equipment-sales index declined to 67.2 from 71.6 in June. Readings over the last several months represent the strongest consistent growth since 2012....
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