Midwest Bankers Still Gloomy on Farmland, Rural Economy

Published on: 20:16PM Sep 17, 2015

Mike Walsten

Low grain and energy prices continue to depress rural economies, according to this month's Rural Mainstreet Index from Creighton University. The index is the result of a monthly survey of rural bank CEOs in a 10-state region from Colorado to Illinois. The Index, which ranges between 0 and 100, sank to 49.0 from August's growth neutral 50.0. "This is the second straight month the overall index has declined, reflecting weakness stemming from lower agricultural and energy commodity prices," said Ernie Goss, Jack A. MacAllister Chair in Regional Economics at Creighton University.

The farmland and ranchland price index for September increased to 35.5 from 32.7 in August. "This is the 22nd straight month the index has moved below growth neutral. But, as in previous months, there is a great deal of variation across the region in the direction and magnitude of farmland prices. On an annualized basis farmland prices are declining by 6% to 7%," said Goss.

The September farm equipment-sales index was unchanged from August's anemic 14.2. "The 2014 and 2015 downturns in farm income continue to reduce sales and production of agriculture equipment dealers and producers across the region. Bankers remain pessimistic about the short and intermediate prospects for agriculture equipment dealers and producers on rural mainstreet," said Goss.

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