For the fifth straight month, 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.
Overall: The overall index for April slipped to a still healthy 69.0 from a record high 71.9 in March. The index ranges between 0 and 100 with a reading of 50.0 representing growth neutral.
Approximately, 37.9% of bank CEOs reported that their local economy expanded between March and April.
“Strong growth in grain prices, the Federal Reserve’s record-low interest rates, and growing exports have underpinned the Rural Mainstreet Economy. Even so, current rural economic activity remains below pre-pandemic levels,” says Creighton University’s Dr. Ernie Goss, who conducts the survey.
Fully 100% of bank CEOs indicated that export markets were important, or very important, to their local economy.
Farming and ranching: For a seventh straight month, the farmland price index advanced above growth neutral. The April reading climbed to 78.6, its highest level since 2012, and up from 71.9 in March. This is the first time since 2013 that the RMI survey has recorded seven straight months of farmland prices above growth neutral.
Bankers reported that approximately 9.1% of farmland sales over past six months have gone to nonfarmer investors.
The April farm equipment-sales index rose to 67.5, its highest level since 2013, and up from March’s very strong 63.5. After 86 straight months of readings below growth neutral, farm equipment sales bounced into growth territory for the last five months.
Confidence: The confidence index, which reflects bank CEO expectations for the economy six months out, fell to a very healthy 72.4 from 76.7 in March. “Federal stimulus checks, improving gain prices and advancing exports have supported confidence offsetting negatives from pandemic ravaged retail and leisure and hospitality companies in the rural economy,” says Goss.”
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.