Optimism Remains for Rural Economies, Despite Rising Inflation

OMAHA, NE – For 13 consecutive months, the Creighton University Rural Mainstreet Index (RMI) has remained above growth neutral, signaling consistent growth for the region and continued optimism for the economic conditions across the 10-state region.

According to the monthly survey of bank CEOs in rural areas dependent on agriculture and/or energy, “solid grain prices, the Federal Reserve’s record-low interest rates, and growing exports have underpinned the economy (and) USDA data shows that 2021 year-to-date agriculture exports are more than 20 percent above that for the same period in 2020” explains Dr. Ernie Goss at Creighton’s Heider College of Business.

Local economies appear to be expanding reports 70 percent of bankers while less than 7 percent describe their local economy in an economic downturn.

Specifically for agriculture, the region’s farmland price index improved to a very strong, and a record high of 90 points, an increase from October’s 85.5 reading and represents the 15th straight month the index has remained above growth neutral (50 points).

Annual cash rents for non-irrigated, non-pasture farmland soared to $262 per acre, up $44 from February 2020.

Concerns are growing in relation to inflation as one banker in Iowa reported that yields and prices ended being up over projections for 2021 “but it appears land costs and all crop inputs will be up significantly in 2022.”

Farm equipment sales climbed to their highest level in more than 10 years, building on a string of 13 consecutive months of growth.
(SOURCE: All Ag News)