February Survey Results at a Glance:
- Overall index remained above growth neutral, but declined from January’s solid reading.
- The signing of USMCA and the Phase 1 trade agreement with China boosted the monthly economic confidence index to a seven-year high.
- Over the past four years, average annual cash rents on nonpasture farmland declined by only 1.5% to $218.
- Over the past year, the percentage of bank CEOs reporting an upturn in farm loan rejections declined from 30.3% to 3.1%.
- On average, bank CEOs reported that 17.3% of farmland purchases were cash sales. This is down from 22.2% recorded five years ago.
- Approximately four in 10 bankers indicated that their banks had restructured farm loans due to a weak farm economy.
OMAHA, Neb. (Feb. 20, 2020) – The Creighton University Rural Mainstreet Index (RMI) declined in February, but remained above growth neutral. This the sixth straight month the reading has moved 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 February declined to 51.6 from 55.9 in January.“Due to weak farm income, 40.6% of bankers reported that their banks had restructured loans while only 3.1% indicated that their banks had rejected a higher percentage of farmland loans. Approximately, one-fourth of bankers indicated no change in lending practices,” said Ernie Goss, PhD, Jack A. MacAllister Chair in Regional Economics at Creighton University’s Heider College of Business.Farming and ranching: After moving above growth neutral in December, the farmland and ranchland-price index has fallen below growth neutral for two consecutive months. Even so, February’s reading improved slightly to 46.8 from January’s 45.6. This is the 74th time in the past 75 months that the index has been below growth neutral.On average, bankers reported annual cash rents for nonpasture farmland of $218 per acre. This is down by only 1.5% from the reading recorded four years ago.The February farm equipment-sales index increased to a weak 37.9 from January’s 35.0. This marks the 77th month that the reading has remained below growth neutral 50.0.Banking: Borrowing by farmers remained weak for February. The borrowing index rose to 50.0 from 48.5 in January, which was its lowest level since February 2013. The checking-deposit index tumbled to 60.9 from January’s 76.5, while the index for certificates of deposit and other savings instruments plummeted to 50.0 from 60.3 in January.This month bankers were asked what percentage of farmland purchases were cash sales. On average, bank CEOs reported that 17.3% of farmland purchases were cash sales. This is down from five years ago when bankers indicated that 22.2% of farmland sales were cash sales....
....MUCH MORE
