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RSS By: Paul Neiffer, Top Producer

Paul is now part of the fourth generation in America that is involved in farming and hopes the next generation will be involved also. Through his blog he provides analysis and insight to farmer tax questions.

Rural Mainstreet Index Remains Strong - But Is It Topping Out?

Jan 24, 2012

Creighton University produces a Rural Main Street Index based upon a survey of rural bankers in six states, Colorado, Iowa, Minnesota, Nebraska, South Dakota and Wyoming.  The index ranges from 0 to 100.  Anything over 50 is considered in an expansion mode. 

For January, the index rose to 59.8 from 59.7 in December which is the highest it has been since June 2007.

Here are some other trends from the survey:

  • Bankers expect average farm input costs to rise by 7.2% in 2012
  • 9 of 10 bankers do not expect the end of the blender's tax credit to have a significant negative impact
  • More than one in four bankers indicated that a decline in agriculture commodity prices is the biggest economic challenge in 2012
  • Almost as many indicated a shortage of jobs and workers was the main economic challenge

 

After rising to a record level of 84.1 in December, the farmland price index fell almost 12% to 74.3 in January, 2012.  A recap by state is as follows:

  • Colorado - Dropped from 88.5 to 78.9
  • Iowa - Dropped from 77.1 to 68.2
  • Minnesota - Dropped from 76.2 to 57.8
  • Nebraska - Dropped from 84.6 to 73.5
  • South Dakota - Dropped from 69.4 to 60.1
  • Wyoming - Dropped from 84.3 to 73.9

 

These are healthy drops in the index, however, this drop is based on only one month of data and December can very very skewed with certain sales happening for tax purposes.  It will be interesting to see what the index numbers for February are.

 

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