The Rural Mainstreet Index put out by Creighton University climbed to its highest level since June of this year. The index had been flat or lower due to the drought during the previous three months, but with the report released last month, it rose to a solid 56.6 from September's weak 48.3. It was the first time since June that it rose above the growth neutral 50 level.
The negative impacts of the drought are being more than offset by high crop prices, expected crop insurance proceeds and high energy price returns for landowners.
The farmland price index continues to soar higher. The October reading was 71.7 which is the 33rd straight month above 50. Bankers reported about 70% of crop yields lower this year while about 19% are indicated higher.
After expanding for seven straight months, the loan demand index dropped dramatically from September's 70.2 to 44.2.
The hiring pace still remains very tepid at only 51.5 up from 50.9. Bankers report uncertainty surrounding healthcare reform, the elections and the fiscal cliff are all restraining employers from much new hiring.
One in four bankers expect a recession in 2013, however, the elections seem to be clouding the outlook.