Creighton University: "Rural Mainstreet Index Rises for August; Bankers Expect 7.8 Percent Decline in Farm Equipment Sales Next 12 Months"

Apologies in advance, I thought we had posted last month's Rural Mainstreet Index and when checking for September saw that someone (ahem) had failed to hit "publish" on the August post.
We'll rectify that today and catch up on Tuesday.

From Creighton's Heider College of Business:

August Survey Results at a Glance:

*  For a seventh straight month the overall index rose above growth neutral.
*  Bankers reported a decline in the sale of agriculture equipment and expect sales to decline by another 7.8 percent over the next 12 months.
*  More than one-half of bankers supported cutting recently enacted tariffs.
*  In reaction to weak farm commodity prices and income, almost one-third of bank CEOs reported rejecting a higher percentage of farm loans.

OMAHA, Neb. (Aug. 16, 2018) – The Creighton University Rural Mainstreet Index climbed above growth neutral in August for a seventh straight 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 overall index climbed to 54.8 from 53.8 in July. The index ranges between 0 and 100 with 50.0 representing growth neutral.

“Surveys over the past several months indicate the Rural Mainstreet economy is expanding outside of agriculture. However, the negative impacts of recent trade skirmishes have begun to surface, weakening already anemic grain prices,” said Ernie Goss, PhD, Jack A. MacAllister Chair in Regional Economics at Creighton University’s Heider College of Business.

According to Jim Stanosheck, CEO of State Bank in Odell, Nebraska, “The tariffs have and are costing our ag customers on grain prices and items they must purchase. Talking to one of my customers this morning, he thought that maybe the tariffs would bring about better prices in the future.”

Farming and ranching: The farmland and ranchland-price index for August was unchanged from July’s 44.7. This is the 57th straight month the index has fallen below growth neutral 50.0.

In reaction to weak farm commodity prices and income, almost one-third, or 31.0 percent, of bank CEOs reported rejecting a higher percentage of farm loans. More than half, or 54.8 percent, indicated raising collateral requirements, while 4.8 percent reported reducing the size of farm loans.

The August farm equipment-sales index fell to 37.8 from July’s 38.8. This marks the 60th consecutive month the reading has moved below growth neutral 50.0.

In terms of the sale of farm equipment over the next 12 months, bankers expect sales to decline by 7.8 percent.

Banking: Borrowing by farmers expanded for August, but at a slower pace than in July, as the loan-volume index declined to 72.2 from 76.9 in July. The checking-deposit index slumped to 36.0 from July’s 37.8, while the index for certificates of deposit and other savings instruments increased to 48.8 from 43.9 in July....   

...MUCH MORE