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RURAL MAINSTREET ECONOMIC INDEX FALLS BELOW GROWTH NEUTRAL AGAIN, MACHINERY SALES FALL TO LOWEST LEVEL IN TWO YEARS
Source: Creighton University

OMAHA, Neb. - The Creighton University Rural Mainstreet Index (RMI) fell for the fifth straight month, sinking below growth neutral for a third consecutive month according to the monthly survey of bank CEOs in rural areas of a 10-state region dependent on agriculture and/or energy.

Overall: The region's overall reading for August slumped to 44.0 from 46.0 in July. The index ranges between 0 and 100 with a reading of 50.0 representing growth neutral. This was the fifth consecutive decline in the region's overall reading.

"The Rural Mainstreet economy is now experiencing a downturn in economic activity. Supply chain disruptions from transportation bottlenecks and labor shortages continue to constrain growth. Farmers and bankers are bracing for escalating interest rates and falling farm commodity prices," said Ernie Goss, PhD, Jack A. MacAllister Chair in Regional Economics at Creighton University's Heider College of Business.

Bank CEOs were asked their assessment of the Inflation Reduction Act. On average, more than half, or 52.2%, expect spending and taxes related to the act to increase inflation and add to the federal deficit.

Among bankers naming drought as an area of concern, Jim Eckert, CEO of Anchor State Bank in Anchor, Ill., said that "in our area, crops generally look good but could use a rain. There are small pockets which are very dry. Without some timely rains, we will have an early harvest this year."

Farming and ranching: The region's farmland price index for August declined to 60.0 from July's 66.0, marking the 23rd straight month that the index has moved above growth neutral. August's solid reading was the lowest index since February 2021.

According to Jim Rothermich of the Land Talker, the average price per acre of Iowa farmland for the first half of 2022 increased from $12,480 to $13,852.

Bankers were asked about Chinese ownership of farmland and food processing in the region. More than nine of 10 bank CEOs, or 91.7%, regard Chinese purchases of farmland and food processing facilities in the region as a threat to the regional economy.

Farm equipment sales: The August farm equipment-sales index sank to 45.9 from 56.5 in July. After 20 straight months of advancing above growth neutral, the index unexpectedly dropped below the threshold to its lowest level since November 2020.

To read the entire report click here.


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