Rural Mainstreet economy reports negative growth for the sixth month in a row

Economic challenges have led to below growth neutral
survey results. (Photo by L. Pound, The Packer)

Last summer, the Rural Mainstreet Index showed good economic growth. But after June 2023's high point of 56.9 on the 100-point scale, the survey's 10-state region reported continued decreases, with September marking the first month below growth neutral at 49.5 -- the term used for a "neutral" growth score of 50. The downward trend has continued over the past six months," reports The Packer, which covers the fresh produce industry. 

Ernie Goss, the Jack A. MacAllister Chair in Regional Economics at Creighton University issued a press release explaining the challenges facing farming and energy-dependent regions, saying: "Higher interest rates, weaker agriculture commodity prices and a credit squeeze are having a significant and negative impact on Rural Mainstreet businesses and Rural Mainstreet farmers."

"Almost three-fourths of bank CEOs named low farm-commodity prices as the biggest risk for farms in 2024," the release said, "And approximately 44% of bankers indicated that the financial positions of farmers in their area had weakened over the past six months."

Gross told The Packer: "This is the eighth time in the past nine months that the index has fallen below growth neutral. Higher borrowing costs, tighter credit conditions and weaker grain prices are having a negative impact on the purchases of farm equipment."

About RHI methodology: Each month, community bank presidents and CEOs in non-metro regions of Colorado, Illinois, Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota, South Dakota and Wyoming are surveyed on their unique economic conditions and projected outlook. The survey offers the most current real-time analysis of the U.S. rural economy, which gleans its data from about 200 rural communities with an average population of 1,300.