Farmland values are maintaining their strength, and loan volumes are declining, but economic growth in rural parts of the Midwest and northern Plains remains slow, according to Creighton University's Rural Mainstreet Index.
The monthly report is based on a survey of bank CEOs in a 10-state region where rural areas are dependent on agriculture or energy: Colorado, Illinois, Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota, South Dakota and Wyoming.
For a third straight month, the overall economic reading hovered slightly above growth-neutral for the region, indicating slow growth. The value slipped from 53.8 in January to 50.1 in February, teetering on the line of growth neutral at 50.
“Only 7.4% of bankers reported improving economic conditions for the month, with 85.2% indicating no change in economic conditions from January’s slow growth,” said Ernie Goss, an economist at Creighton University’s Heider College of Business.
Farmland values showed their 29th consecutive month of advancement above neutral.
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The loan volume index for the region declined by nearly 10 points from 58 in January to 48.1 in February. However, the checking deposit index fell over 30 points compared to the month prior.
The 10-state region surveyed accounts for 75.8% of the nation’s ethanol production. Of bankers surveyed with an ethanol plant in their economy, nine out of 10 deemed it an important industry. Sixty-three percent of the bankers support the capture and sequestration of CO2 via pipelines in their area, assuming adequate compensation to farms that the infrastructure crosses.
The index also reported sinking home sales, labor shortages impacting rural main street businesses and "very negative" regional confidence.
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