Friday, March 17, 2017

Rural Mainstreet Index in heartland remains negative for 19th straight month

The Rural Mainstreet Index in March remained below 50, on a 0-100 scale, for the 19th straight month, indicating economic weakness in the 10-state region that stretches from Illinois to Wyoming and is dependent on agriculture and energy. Creighton University economist Ernie Goss surveys bank CEOs in rural areas of Colorado, Illinois, Iowa, Kansas, Minnesota, Missouri, Nebraska, Wyoming and the Dakotas.

The index was 45.3 in March, down slightly from 45.8 in February, which was the highest since it reached 49 in September 2015. CEOs said the average annual cash rents for crop acreage was $211 per acre, down 16 percent from last year. More than seven of 10 CEOs said they expect farm loan defaults to rise over the next 12 months, almost one in six expect such defaults to expand by more than 10 percent and almost one-third report that property taxes are a major economic problem for farmers in their area.

Goss said, "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.” (Creighton graphic: Rural Mainstreet Index)

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