Downturn in Ag Affects Rural Economies, Surveys Continue to Show Lag

The Federal Reserve Bank of Kansas City reported earlier this month that financial pressures on farmers are bleeding beyond the farm and into rural communities.

The Fed reports that per-capita income is down throughout the 10th district, which includes Kansas, Missouri, Nebraska, Oklahoma, New Mexico, Colorado, and Wyoming.

The data show crop farmers are bearing the brunt of the downturn; livestock producers continue to see better market conditions because of the affordability of grain.

The Fed reported that through 2014, growth in per capita personal income was notably smaller in states most heavily concentrated in crop production. Per capita personal income expanded less than 1% in Iowa and South Dakota and declined slightly in Nebraska.

By comparison, the national average in per capita personal income was 3.9% from 2013 to 2014.

In the monthly “Rural Mainstreet Index” report from Creighton University, May showed modest improvement over April, inching upward from 46 to 49 on the 100-point scale.

The index, which is based on survey responses from bank CEOs, said the strong dollar affects rural economies.

“The stronger U.S. dollar has made U.S. goods, especially agriculture and energy products, less competitively priced abroad,” said Ernie Goss, the Jack A. MacAllister Chair in Regional Economics at Creighton. S