Rural bankers across 10 midwestern states expect farmland values to decline by 1% next year, according to the monthly Rural Minstreet Index (RMI) survey conducted by Dr. Ernie Goss, Creighton University. The RMI, which ranges between 0 and 100 with 50.0 representing growth neutral, was unchanged from October's moderate 54.3. "The overall index for the Rural Mainstreet Economy continues to point to positive, but slow economic growth in the months ahead," says Goss.
For only the second time in the past 12 months, the farmland-price index advanced. The November index rose to 54.3 from 50.9 in October. "Despite the expansion in the index for the month, I expect farmland prices to grow at significantly slower rates for the first six months of 2014 than they did for the same period in 2013. In the November survey almost half, 49.1%, of the bankers indicated they expect farmland prices to decline by an average of 1% over the next 12 months," Goss says.
Dan Coup, president of the First National Bank in Hope, Kan., responded, "Based on sales at recent public auctions, it appears there is a definite weakness in (farmland) prices in some of our market areas. In my opinion due to two factors - declining wheat and corn prices and an increase in farmland acres being offered for sale."
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. Bankers from Colorado, Illinois, Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota, South Dakota and Wyoming are included. The survey is supported by a grant from Security State Bank in Ansley, Neb.
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