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Thursday, October 25, 2012

Survey of rural bankers shows improvement of economic conditions in Central U.S.

After a three-month slump, the Rural Mainstreet Index of economic conditions in a 10-state area of the Central U.S. has started to climb. The Creighton University survey of bank CEOs shows the rural economy above "growth neutral" for the first time since June. Lead researchers Ernie Goss said in the October RMI report, "Negative impacts of the drought are being more than offset by the positives of very strong incomes from high agriculture and energy prices."

Farmland prices and farm equipment sales surged, notes Julie Harker of Brownfield Agriculture News. Only18 percent of bankers surveyed said 2012 crop yields in their areas are higher than last year, and almost 70 percent are lower. Hiring increased, but "at a snail's pace," Goss reported, and the index of bankers' confidence in the economy for the next six months was up from September, but is still weak.

The RMI ranges between 0 and 100, with 50 being growth neutral. October's survey places the index at 56.6, notes the Hamburg Reporter, in Iowa's southwestern corner. The farmland-price index reached 71.7, its highest mark since March. October is the 33rd consecutive month that it has risen. "Loan demand unexpectedly plummeted for the month," the Reporter notes. It dropped to 44.2 from September's mark of 70.2. Goss wrote in the report that the drought "failed to increase the demand for loans from farming and nonfarming organizations in the region." The Reporter lists the RMI for individual states: Colorado, Illinois, Iowa, Kansas, Minnesota, Missouri, Nebraska, the Dakotas and Wyoming.

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