Home News Livestock Crops Markets Hay, Range & Pasture Home & Family Classifieds Resources This Week's Journal



Farm Survey


AgriMartin
Journal Getaways

Advertisement
Reader Comment:
by jJane

"Thanks for sharing this story!"....Read the story...
Join other discussions.

Rural Mainstreet Index shows slow, positive pace


By Larry Dreiling

A survey of rural bankers in 10 Midwest and High Plains states suggests slow, but positive, economic growth is ahead.

A report released Feb. 21 on the Rural Mainstreet Index says the overall index rose 2.6 points. Creighton University economist Ernie Goss oversees the report, and he says it is the index's fifth increase in the past six months. Goss says he expects economic growth for the region "will continue on a slow but positive pace."

The index climbed to 58.2 in February, compared with 55.6 in January. The index ranges from 0 to 100, with 50 representing growth neutral. Any score below 50 on the index suggests contraction in the months ahead.

The index is based on a survey of rural bankers in Colorado, Illinois, Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota, South Dakota and Wyoming.

"The February RMI is down only slightly from the reading for February of last year. I anticipate that economic growth for the region will continue on a slow but positive pace," Goss said.

Farming: After peaking at 83.9 in November of last year, the farmland-price index has now declined for three straight months. While the index declined, it was still strong at 67.0, down from January's 71.5. This is the 37th consecutive month that the farmland-price index has been above growth neutral.

The farm equipment-sales index rose to 65.8 from 63.8 in January. "Based on our surveys over the past several months, 2013 is stacking up to be a good year for farm income according to bankers. This is showing up in healthy growth in farmland prices and the sales of farm equipment," said Goss, the Jack A. MacAllister Chair in Regional Economics at Creighton.

"We are watching to see how the area pastures will do this spring," Jeffrey Gerhart, CEO of the Bank of Newman Grove, Newman Grove, Neb., and chairman of the Independent Community Bankers of America said. "Some pastures may not be able be grazed this year. Hay crops could also be significantly impacted should the drought continue."

This month bankers were asked several questions related to farm commodity prices. First, bankers were asked what corn price would put farm loan repayments in jeopardy. On average, bankers reported that corn prices below $3.86 would threaten repayment of farm loans.

Second, bankers were asked the break-even corn price for farmers that rent their land. On average bankers estimated a break-even corn price of $4.84 per bushel. The University of Illinois Department of Agricultural Economics projected 2013 corn prices of $5.73 per bushel.

"Given this projection along with current strong balance sheets and cash flow of farmers, agriculture repayments and profitability for farmers should be very similar to 2012," Goss said. "Even so, significant changes in Federal Reserve policy or international trade disruptions could pose a threat to the Rural Mainstreet economy in 2013."

Added Dale Bradley, CEO of The Citizens State Bank, in Miltonvale, Kan., "Farmers should be very cautious in 2013 and 2014 and be conservative from an economic standpoint."

For the fourth time in the past five months, the loan volume sector index remained below growth neutral. The index rose to a weak 46.7 from January's frail 39.0 and well ahead of last February's 31.0.

The checking-deposit index slipped to 67.2 from 78.1 in January while the index for certificates of deposit and other savings instruments rose to 47.6 from 42.2 in January.

"Banking data continue to reflect healthy farm income and an expanding Rural Mainstreet economy," said Goss.

February's hiring index advanced to 54.9 from 52.4 in January.

"New hiring in the region continues to expand at a modest pace. While job growth remains slow, it is well up from one year ago when job growth was at virtual standstill," said Goss.

The confidence index, which reflects expectations for the economy six months out, softened to 51.7 from 55.5 in January.

"The failure to pass a new farm bill and the impending spending sequestration combined to lower confidence in future Rural Mainstreet economic growth," said Goss.

The February home-sales index soared to 65.0 from January's 55.6. The February retail-sales index advanced to a feeble 46.6 from January's 44.5.

"Much like the national numbers, Rural Mainstreet retailers are experiencing cuts in overall sales since the beginning of the year," said Goss.

Each month, community bank presidents and CEOs in nonurban, agriculturally and energy-dependent portions of a 10-state area are surveyed regarding current economic conditions in their communities and their projected economic outlooks six months down the road.

This survey represents an early snapshot of the economy of rural, agriculturally and energy-dependent portions of the nation.

The Rural Mainstreet Index 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.

Goss and Bill McQuillan, president of CNB Community Bank of Greeley, Neb., created the monthly economic survey in 2005.

Larry Dreiling can be reached by phone at 785-628-1117, or by email at ldreiling@aol.com.

Date: 3/4/2013



Google
 
Web hpj.com

Copyright 1995-2014.  High Plains Publishers, Inc.  All rights reserved.  Any republishing of these pages, including electronic reproduction of the editorial archives or classified advertising, is strictly prohibited. If you have questions or comments you can reach us at
High Plains Journal 1500 E. Wyatt Earp Blvd., P.O. Box 760, Dodge City, KS 67801 or call 1-800-452-7171. Email: webmaster@hpj.com

 

Archives Search







Inside Futures

Editorial Archives

Browse Archives