Rural bankers say Midwest economy helped by high crop prices and flood rebuilding, hurt by trade war, but favor fight

Creighton University chart; click on the image to enlarge it.

According to the July Rural Mainstreet Index, the economy in a 10 states where agriculture and energy are economically critical (Colorado, Illinois, Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota, South Dakota and Wyoming) is still growing this month, but not as much as last month.

The index rose above growth-neutral this month, the sixth time in the past seven months it has done so, reports Creighton University economist Ernie Goss, who compiles the index via a monthly survey of small-bank CEOs.

Higher farm-commodity prices and rebuilding efforts from recent flooding have helped rural economies, but nearly nine of 10 bankers surveyed said the trade war with China had hurt the economy. However, Goss reports that nearly seven in 10 support continuing or raising tariffs on Chinese goods; he doesn't relay any reasons they may have given.

The farmland and ranchland price index rose slightly from June to July, from 41.2 to 44.8, though it remained below 50 (growth-neutral) for the 67th straight month. Farm equipment sales also rose some in the past month, from 31.3 to 35.7, marking the 70th straight month it has been below growth-neutral, Goss reports.

The confidence index, which measures expectations for the economy six months from now, dropped from 53.3 in June to 51.5 in July, marking a positive but anemic outlook among bankers, Goss says.

Goss also reports: Land values are up in Colorado because of demand for hemp and marijuana production; Illinois bankers say crop planting is still significantly behind in some areas of the state; Iowa bankers noted that farmers will get a great price on their corn this year, if they were able to plant it; Minnesota bankers noted that some areas had not experienced the extensive flooding seen by the rest of the Corn Belt, and that their farmers were looking to have a good year.