News

Ag economy improving according to Midwest survey

Creighton University’s “Rural Mainstreet Index” hit a two-year high in May.

The monthly survey of rural bankers gives a snapshot of the economy in parts of the country that are dependent on agriculture and energy sectors.

Economist Ernie Goss says lender confidence levels on the rural economy for May inched into positive territory for the first time since August 2015, and while farm land prices and ag equipment sales were still negative, they also moved in a positive direction.  “It was still not a great report, but we’re talking about many months, in this case 20 straight months, of the overall index being below growth neutral.  Moving above growth neutral was certainly good news.”

Survey participants said in the next five years rising regulatory costs will be their top challenge, and the number of rural bankers that said farm foreclosures was the biggest risk doubled to one in ten, but Goss says it would take even lower commodity prices for that to be a major concern.  “At this point in time agricultural commodity prices have at least stabilized.  They’re not growing, but what we need to see of course is a good 20 to 25 percent increase in grain prices and livestock prices.”

Nearly 90 percent of bankers said low commodity prices were the biggest threat to the rural economy, slightly less than last year.

Participants surveyed were located in Illinois, Iowa, Minnesota, Missouri and Nebraska…also, Colorado, Kansas, North Dakota, South Dakota and Wyoming.

AUDIO: Interview with Ernie Goss