- After four straight months of above growth neutral readings, the Rural Mainstreet Index (RMI) slumped to growth neutral, 50.0, in August.
- Farmland cash rents are expected to expand by 1.3% over the next year.
- Less than one-third of bank CEOs expect a “soft landing” for the economy. Approximately one-third anticipate a “hard landing,” or negative growth from Federal Reserve rate hikes.
- Bankers reported continuing record low deposits.
- Only 14.8% expect a stronger farm economy one year out. Almost one-half, or 48.2%, forecast a weaker farm economy 12 months out.
- The region’s agriculture exports contracted from $8 billion in the first half of 2022 to $6.8 billion for the same period in 2023 for a 14.6% slump.
Overall: The region’s overall reading in August fell to 50.0 from July’s much stronger 55.6. The index ranges between 0 and 100, with a reading of 50.0 representing growth neutral.
“This is the fifth consecutive month that the overall RMI has moved at or above growth neutral. However, I expect recent pullbacks in growth to push the Federal Reserve to forgo an interest rate increase at its next meetings on September 19-20,” said Ernie Goss, PhD, Jack A. MacAllister Chair in Regional Economics at Creighton University’s Heider College of Business.
A large share of bankers support a cessation of rate increases. Said Larry Winum, CEO of Glenwood State Bank in Glenwood, Iowa: “In my view, the Federal Reserve should take a long pause on any further increase in interest rates. It’s time for a breather.”