(Omaha, Nebraska) The Creighton University Rural Mainstreet Index (RMI) fell for the fifth straight month, sinking below growth neutral for a third consecutive month according to the monthly survey of bank CEOs in rural areas of a 10-state region dependent on agriculture and energy.
The region’s overall reading for August slumped to 44.0 from 46.0 in July. This was the fifth consecutive decline in the region’s overall reading. The index ranges between 0 and 100, with a reading of 50.0 representing growth neutral.’
“The Rural Mainstreet economy is now experiencing a downturn in economic activity. Supply chain disruptions from transportation bottlenecks and labor shortages continue to constrain growth. Farmers and bankers are bracing for escalating interest rates and falling farm commodity prices,” said Ernie Goss, Ph.D., Jack A. MacAllister Chair in Regional Economics at Creighton University’s Heider College of Business.
Bank CEOs were asked about their assessment of the Inflation Reduction Act. On average, more than half, or 52.2%, expect spending and taxes related to the act to increase inflation and add to the federal deficit.
Among bankers naming drought as an area of concern, Jim Eckert, CEO of Anchor State Bank in Anchor, Ill., said that “in our area, crops generally look good but could use a rain. There are small pockets that are very dry. We will have an early harvest this year without some timely rains.”
The region’s farmland price index for August declined to 60.0 from July’s 66.0, marking the 23rd straight month that the index has moved above growth neutral. August’s solid reading was the lowest index since February 2021.
According to Jim Rothermich of the Land Talker, the average price per acre of Iowa farmland for the first half of 2022 increased from $12,480 to $13,852.
Bankers were asked about the region’s Chinese ownership of farmland and food processing. More than nine of 10 bank CEOs, or 91.7%, regard Chinese purchases of farmland and food processing facilities in the region as a threat to the regional economy.
