Rural Economic Index Rises in June

Posted on 06/21/2019 11:22 AM

The Creighton University Rural Mainstreet Index (RMI) for June rose above growth neutral for the month. According to the monthly survey of bank CEOs in rural areas of a 10-state region dependent on agriculture and/or energy, the RMI for June indicated positive growth for the region.

Overall: The overall index climbed to 53.2 from 48.5 in May. This is the sixth time in the past seven months that the index has risen above growth neutral. The index ranges between 0 and 100 with 50.0 representing growth neutral, and an RMI below the growth neutral threshold. 50.0, indicating negative growth for the month.

"Higher agriculture commodity prices and rebuilding from recent floods boosted the RMI for the month. Furthermore, despite the negatives from the trade war, 69.4% of bankers support either raising, or continuing current tariffs," says Creighton University's Dr. Ernie Goss, who conducts the monthly survey.

Jeff Bonnett, president of Havana National Bank in Havana, Illinois, said it has been estimated that anywhere from 15 to 20 million acres were not planted in corn.

According to Bonnett, "Based upon this information, corn prices should be in the $5.75 to $6 (or more) a bushel range. What are we missing? Will the true corn acres planted be revealed after the required certification through FSA due by July 15th?"

Farming and ranching: The farmland and ranchland-price index for June improved to a still weak 44.8 from May's 41.2. This is the 67th straight month the index has remained below growth neutral 50.0.

The June farm equipment-sales index increased to 35.7 from May's 31.3. This marks the 70th straight month the reading has fallen below growth neutral 50.0.

Banking: Borrowing by farmers for June remained very strong. The borrowing index fell to a strong 72.6 from May's 79.7 and April's record high 81.3. The checking-deposit index rose to 50.0 from May's 42.4, while the index for certificates of deposit and other savings instruments rose slightly to 51.6 from 51.5 in May.

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