Rural bankers report strong local economies and record farmland prices, grow more confident about next 6 months

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Rural bankers in 10 central states that rely on agriculture and energy reported strong local economies for the 12th straight month, along with record-high farmland prices, in a December survey. The Rural Mainstreet Index polls bankers in about 200 rural places averaging 1,300 population in Colorado, Illinois, Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota, South Dakota and Wyoming.

The overall index fell slightly to 66.7 from November's 67.7; anything over 50.0 is growth-positive. The confidence index, which measures bankers' expectations for the economy six months from now, rose to a growth-positive 55.2 from November's 48.4 after declining for five consecutive months. Some bankers expressed concern about inflation and said it was affecting locals.

"Solid grain prices, the Federal Reserve’s record-low interest rates, and growing exports have underpinned the Rural Mainstreet Economy," wrote Creighton University economist Ernie Goss, who compiles the index. Agriculture Department "data show that 2021 year-to-date agriculture exports are more than 20.7% above that for the same period in 2020."

Though non-farm employment in Rural Mainstreet states remains 2.5% below pre-pandemic levels, the new hiring index rose to 72.4 from November's 67.7. And December's farm equipment sales index jumped to 74.1 from 62.1 in November, marking the 13th month straight above growth neutral and the strongest index recorded since April 2011.