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Farm economy resurgence remains strong, indicators soar to record high

A monthly survey of rural bankers in the Midwest reflects growing optimism about the ag economy.

Creighton University Economist Ernie Goss says the March Rural Mainstreet Index is the highest since the survey began in 2006. “This was a very strong report with the best numbers we’ve seen since 2013 in terms of farm land prices. They’re growing now at a pretty solid clip,” he said. “We’re seeing farmers going back in and purchase equipment.”

The overall index for March soared to a record high 71.9 from February’s solid 53.8. The index ranges between 0 and 100 with a reading of 50.0 representing growth neutral.

 For a sixth straight month, the farmland price index advanced above growth neutral. The March reading climbed to 71.9, its highest level since November 2012, and up from 60.0 in February.

Goss says federal farm support and sharp gains in grain prices contributed, but says the livestock sector could improve. “As individuals go back to restaurants and purchase that steak, or other meat products – COVID-19 had pulled down those sales.”

Bankers reported that approximately 12.3% of farmland sales were cash sales, which is down from 17.3% recorded in February 2020.

The March farm equipment-sales index rose to 63.5, its highest reading since February 2013, and up from 62.7 in February. After 86 straight months of readings below growth neutral, farm equipment bounced into growth territory for the last four months.

Despite the positive report, Goss says the overall rural economy is not back to pre-COVID-19 levels.

The full report is available here.