From Creighton's Heider College of Business, July 21:
The Creighton University Rural Mainstreet Index (RMI) fell for the fourth straight month, sinking below growth neutral for a second consecutive month according to the monthly survey of bank CEOs in rural areas of a 10-state region dependent on agriculture and/or energy.
Overall: The region’s overall reading for July slumped to 46.0 from 49.8 in June. The index ranges between 0 and 100 with a reading of 50.0 representing growth neutral. This was the fourth consecutive decline in the region’s overall reading.
“The Rural Mainstreet economy is now experiencing a downturn in economic activity. Supply chain disruptions from transportation bottlenecks and labor shortages continue to constrain growth. Farmers and bankers are bracing for escalating interest rates — both long-term and short-term,” said Ernie Goss, PhD, Jack A. MacAllister Chair in Regional Economics at Creighton University’s Heider College of Business.
Bankers were asked this month to identify the greatest risk for farmers over the next 12 months. Regarding the top risks, 53.9% named rising input prices, 34.6% indicated falling grain/livestock prices, and 11.5% reported drought was the top threat.
Among bankers naming drought as the greatest risk, Jim Eckert, CEO of Anchor State Bank in Anchor, Ill., said “recent rains have improved crop prospects, but our area in Central Illinois is still dry compared to northern and southern Illinois.”Regarding risks to farmers, James Brown, CEO of Hardin County Savings Bank in Eldora, Iowa, reported that “it's the combination of higher input costs and a potential fall in commodity prices that are the biggest risks to farmers. Not just one or the other.”
Farming and ranching: The region’s farmland price index for July declined to 66.0 from June’s 76.8, marking the 22nd straight month that the index has moved above growth neutral. July’s solid reading was the lowest index since February 2021. ...
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