- The overall index fell below growth neutral for the 19th straight month.
- Rural Mainstreet businesses, not directly linked to farming, expanded employment for the month.
- Average annual cash rents for crop acreage was $211 per acre, which is down 16 percent from last year according to bank CEOs.
- More than seven of 10 bank CEOs expect farm loan defaults to rise over the next 12 months. Almost one in six bankers expect such defaults to expand by more than 10 percent.
- Almost one-third of bankers report that property taxes are a major economic problem for farmers in their area.
Overall: The index, which ranges between 0 and 100 slipped to 45.3 for March from 45.8 in February. The last time the overall index was at or above growth neutral was August 2015.
“Weak farm commodity prices continue to squeeze Rural Mainstreet economies. Over the last 12 months, livestock commodity prices have tumbled by 6.6 percent and grain commodity prices have slumped by 0.9 percent. Thus, year over year price changes remain negative, but are now less negative than several months ago,” said Ernie Goss, Jack A. MacAllister Chair in Regional Economics at Creighton University's Heider College of Business.
But there was a great deal of variability across the 10-state region. For example, Scott Tewksbury, president of Heartland State Bank in Edgeley, North Dakota reported, “Record 2016 crop yields have enabled most crop based farms to have a good economic year in our area, but concerns remain over projected profitability for 2017.
On average, bankers reported an average cash rent for cropland of $212 per acre, which is down by 16.1 percent from last year.
According to Pete Haddeland, CEO First National Bank in Mahnomen, Minnesota, “Land rents in our area are working their way down.”
The March farm equipment-sales index increased to a still very weak 22.0 from 20.5 in February. This marks the fifth straight month that the reading has advanced.
Banking: Borrowing by farmers remained above growth neutral for March as the loan-volume index advanced to 58.4 from last month’s 50.1. The checking-deposit index slumped to a still solid 56.0 from 68.1 in February, while the index for certificates of deposit and other savings instruments increased to 47.6 from 46.8 in February.
Hiring: The job gauge rose to 59.6 from February’s 54.3. Rural Mainstreet businesses not linked to agriculture increased hiring for the month at a solid pace.
Confidence: The confidence index, which reflects expectations for the economy six months out, rose to 47.5 from 45.7 in February indicating a continued pessimistic outlook among bankers. “Until agricultural commodity prices begin to trend higher, I expect banker’s economic outlook to remain weak,” said Goss.
Home and Retail Sales: Home sales moved higher for the Rural Mainstreet economy for March with a reading of 56.2, down slightly from February’s 57.8. The March retail-sales index declined to 41.5 from February’s 45.8. “Much like their urban counterparts, Rural Mainstreet retailers are experiencing pullbacks in sales,” reported Goss.
This survey represents an early snapshot of the economy of rural agriculturally and energy-dependent portions of the nation. The Rural Mainstreet Index (RMI) is a unique index covering 10 regional states, focusing on approximately 200 rural communities with an average population of 1,300. It gives the most current real-time analysis of the rural economy. Goss and Bill McQuillan, former chairman of the Independent Community Banks of America, created the monthly economic survey in 2005.
Colorado: Colorado’s Rural Mainstreet Index (RMI) rose to 43.0 from 37.1 in February. The farmland and ranchland-price index sank to 49.4 from February’s 66.6. Colorado’s hiring index for March declined to 56.5 from February’s 68.2.
Illinois: The March RMI for Illinois decreased to 40.3 from 46.4 in February. The farmland-price index declined to 30.5 from February’s 34.8. The state’s new-hiring index fell to 51.1 from last month’s 56.7.
Iowa: The March RMI for Iowa fell to 40.0 from 46.1 in February. Iowa’s farmland-price index for March sank to 30.4 from 40.1 I February. Iowa’s new-hiring index for March declined to 50.5 from February’s 58.6.
Kansas: The Kansas RMI for March increased to 43.4 from February’s 40.8. The state’s farmland-price index advanced to 32.0 from 16.8 in February. The new-hiring index for Kansas improved to 57.2 from 48.3 in February.
Minnesota: The March RMI for Minnesota dipped to 46.1 from February’s 47.5. Minnesota’s farmland-price index slumped to 33.4 from 38.1 in February. The new-hiring index for the state jumped to 62.7 from last month’s 57.9.
Missouri: The March RMI for Missouri advanced to 56.7 from 55.9 in February. The farmland-price index sank to 42.3 from February’s 56.2. Missouri’s new-hiring index slipped to 61.2 from 64.4 in February.
Nebraska: The Nebraska RMI for March declined to 43.3 from 47.1 in February. The state’s farmland-price index fell to 32.0 from February’s 39.3. Nebraska’s new-hiring index declined to 57.1 from 58.3 in February.
North Dakota: The North Dakota RMI for March slumped to 25.4 from February’s 38.0. The farmland-price index increased to 23.1 from February’s 19.9. North Dakota’s new-hiring index plummeted to 21.3 from 38.1 in February.
South Dakota: The March RMI for South Dakota fell to 51.3 from February’s 55.9. The farmland-price index slumped to 36.0 from February’s 59.2. South Dakota's new-hiring index advanced to 73.0 from February’s 65.5.
Wyoming: The March RMI for Wyoming sank to 36.5 from 42.3 in February. The March farmland and ranchland-price index climbed to 28.6 from February’s 22.3. Wyoming’s new-hiring index fell to 43.5 from February’s 46.1.