- For a 14th straight month, the Rural Mainstreet Index fell below growth neutral.
- Overall index slumps to lowest level since April 2009.
- Bank CEOs project more than one in five farmers with negative 2016 cash flows.
- More than one in four bank CEOs expect rising regulatory costs to be the biggest challenge to their bank operations over the next 5 years.
- Gains reported for Colorado, Iowa, Nebraska and South Dakota while losses were recorded for Illinois, Kansas, Minnesota, Missouri, North Dakota and Wyoming.
OMAHA, Neb.(Oct. 20, 2016) – The Creighton University Rural Mainstreet Index sank for October and remained below growth neutral for the 14th straight 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 index, which ranges between 0 and 100 fell to 31.8 from September’s 37.3. This month’s reading is the lowest recorded since April 2009.
“Over the past 12 months, livestock commodity prices have tumbled by 19.7 percent and grain commodity prices have slumped by 18.5 percent. The economic fallout from this price weakness continues to push growth into negative territory for six of ten states in the region,” said Ernie Goss, Jack A. MacAllister Chair in Regional Economics at Creighton University's Heider College of Business.
Jon Schmaderer, president of Tri-County Bank in Stuart, Nebraska said, “The calf market has now officially followed suit with grain and other livestock pricing declines.” Another bank CEO reported calf prices are going to be down 30 to 40 percent, which will have a large downward economic impact.