Creighton University released the March survey results for the Rural Mainstreet Index that shows some discouraging news. The reading came in below growth neutral fir the 19th straight month, according to a survey of bank CEO's in rural areas in a 10 state region that includes Nebraska.
“Weak farm commodity prices continue to squeeze Rural Mainstreet economies. Over the last 12 months, livestock commodity prices have tumbled by 6.6 percent and grain commodity prices have slumped by 0.9 percent. Thus, year over year price changes remain negative, but are now less negative than several months ago,” said Ernie Goss, Jack A. MacAllister Chair in Regional Economics at Creighton University's Heider College of Business.
The survey showed the average annual cash rents for crop acreage was $211 per acre, down 16% from last year. More than 7 of 10 bank CEOs expect farm loan defaults to rise over the next 12 months. Almost one in six bankers expects the defaults to expand by more than 10%.
The index dropped to 45.3 for March, down from 45.8 in February. The index hasn't been above growth-neutral 50 since August of 2015.
The report shows the farmland and ranch land index dropped to 33.0, down from February's 33.7. The report shows this is the 40th straight month the index has been below growth neutral. The index for farm equipment sales increased to 22.0, up from 20.5 in February. That index has shown slight increases over the past several months.
In banking, borrowing by farmers increased to 58.4, up from 50.1 in February.
Bankers from Colorado, Illinois, Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota, South Dakota and Wyoming are included in this survey.
Nebraska's Rural Mainstreet Index declined to 43.3 in March compared to 47.1 in February. The state's farmland price index fell to 32.0 in March from 29.3 in February. The new hiring index declined slightly.
Iowa's Main Street Index fell to 40.0 in March from 46.1 in February. The state's farmland price index for March dropped to 30.4 in March compared to 40.1 in February. Iowa's new hiring index also dropped.
For Creighton University's full report click here