Despite Looming Challenges, Rural Banking Index Remains Strong

OMAHA, NE – For the 12th straight month, the Creighton University Rural Mainstreet Index (RMI) remained above growth neutral, according to the monthly survey of bank CEOs in rural areas of a 10-state region dependent on agriculture and energy.

Overall, the region’s reading for November rose to 67.7 from 1.6 points on the 100 point scale. The index ranges between 0 and 100, with a reading of 50.0 representing growth neutral.

“Solid grain prices, the Federal Reserve’s record-low interest rates, and growing exports have underpinned the Rural Mainstreet economy. USDA data show that 2021 year-to-date agriculture exports are more than 23.2 percent above that for the same period in 2020. This has been an important factor supporting the Rural Mainstreet economy,” explained Dr. Ernie Goss, Chair in Regional Economics at Creighton University’s Heider College of Business.

“More than eight of 10 bankers expect, if implemented, the stepped-up basis portion of President Biden’s $3.5 trillion bill before Congress to have a negative impact on the Rural Mainstreet economy,” said Goss.

The region’s farmland price index improved to a record high of 85.5, representing the 15th consecutive month of growth optimism.

Conversely, the farm equipment sales index slipped more than 2.5 points but remained at a robust 62.1. Over the last several months, farmland prices and equipment sales readings represent the most consistent growth since 2012.
(SOURCE: All Ag News)