Midwestern Economic Outlook Soars to Highest Level since 2011

Posted on 02/18/2021 12:09 PM

For the fourth time in the past five months, the Creighton University Rural Mainstreet Index (RMI) climbed above growth neutral. According to the monthly survey of bank CEOs in rural areas of a 10-state region dependent on agriculture and/or energy, the index increased to its highest level since January 2020. The overall index for February rose to 53.8 from January’s 52.0. The index ranges between 0 and 100 with a reading of 50.0 representing growth neutral.

“Sharp gains in grain prices, federal farm support, and the Federal Reserve’s record-low interest rates have underpinned the rural main street economy,” says Dr. Ernie Goss, who conducts the monthly survey. “Only 8% of bank CEOs indicated economic conditions worsened from the previous month. Even so, current rural economic activity remains below pre-pandemic levels,” he says.   

Farming and ranching: For a fifth straight month, the farmland price index advanced above growth neutral. The February reading climbed to 60.0, its highest level since May 2013, and up from 56.3 in January. This is first time since 2013 that Creighton’s survey has recorded five straight months of above growth-neutral farmland prices.

Bank CEOs estimated 2021 cash land rent for non-irrigated, non-pastureland at $218.  

The February farm equipment-sales index rose to 62.7, its highest reading since February 2013, and up from 54.5 in January. After 86 straight months of readings below growth neutral, farm equipment bounced into growth territory for the last three months.    

“As a result of the rapidly improving farm economy, bankers expect farm equipment sales to expand by 3.8% over the next 12 months. This is up significantly from October when bank CEOs estimated that farm equipment sales would fall by an additional 3.1% over the same period,” says Goss.  

Bankers once again report anemic loan volumes. The February loan volume index increased to a weak 46.1 from January’s 33.9. The checking-deposit index soared to record high 88.5 from January’s 88.0, while the index for certificates of deposit, and other savings instruments increased to 46.2 from 46.0 in January.

Confidence: The confidence index, which reflects bank CEO expectations for the economy six months out, rose to a very healthy 64.0, its highest level since March 2011, and up from January’s 60.0. “Federal farm support payments, improving gain prices and advancing exports have supported confidence offsetting negatives from pandemic ravaged retail and leisure and hospitality companies in rural areas,” states Goss.


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