Rural Mainstreet Index dips in April, remains negative for 20th straight month

The Rural Mainstreet Index in April remained below 50, on a 0-100 scale, for the 20h 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 in April was 44.6, down from 45.3 in March and 45.8 in February, which was the highest since it reached 49 in September 2015. Farmland prices declined for the 41st straight month, "but the percent of cash farmland sales remained steady from 2015," Goss writes. He notes that loan volume soared to a record level as banks rejected fewer loan applications and almost one-third of bankers indicated "no change in lending practices stemming from the downturn in the farm economy." He writes, "for 2017, bank CEOs expect approximate cash expenses to exceed cash revenues for 17.1 percent of grain farmers, down from 19.5 percent in 2016."

Goss said, "Weak farm commodity prices continue to squeeze Rural Mainstreet economies. Over the last 12 months, livestock commodity prices have tumbled by 5.8 percent and grain commodity prices have slumped by 4.5 percent. The U.S. Department of Agriculture is estimating 2017 will mark the fourth consecutive year that farm income has declined. This downward trend has pushed our survey results into negative territory,” (Creighton graphic: Rural Mainstreet Index)