Rural Mainstreet Index hits lowest number in five years; farmland prices fell for 16th straight month

The Rural Mainstreet Index in March fell to its lowest level since February 2010, reports Midwest Producer. The monthly survey of bankers from Colorado, Illinois, Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota, South Dakota and Wyoming found that farmland prices had dropped for the 16th straight month and agricultural equipment sales fell to a record-low index level.  Only 7.2 percent of ethanol plants have reduced production due to lower energy prices, and about one-third of of bankers say the Federal Reserve should not raise interest rates in 2015.

The index, which ranges between 0 and 100, was at 43.6 in March, reports High Plains/Midwest Ag Journal. Ernie Goss of Creighton University, which publishes the index, said in a statement: “The stronger U.S. dollar is undermining the farm and energy sectors by weakening agricultural exports, crop prices, livestock prices and energy prices. Rural Mainstreet businesses dependent on export, agriculture or energy are experiencing pullbacks in economic activity. Even though crop prices have stabilized, demand for farmland remains weak pulling agricultural land prices down again."

The March farm-equipment sales index fell "to a record low of 15.2 and down from February’s already fragile 19.5," the Journal writes. "The index has been below growth neutral for 20 straight months." (Read more)