Rural Index Remains Weak, Farm Equipment Sales Improve

The Creighton University Rural Mainstreet Index rose in February but remains weak. The index, measured monthly among rural bank CEOs, increased from 34.8 in January to 37 in February.

The February index specific to farm-equipment sales climbed to 11.3 from January’s record low 7.0.

Economist Ernie Goss said the strong U.S. dollar and global economic weakness have pushed grain prices down by 11%, and slaughter cattle prices are 22% lower over the past 12 months.

“These weaker prices have discouraged farmers from buying additional agriculture equipment and have negatively affected the agriculture equipment dealers and manufacturers in the region,” he said.

Goss, who leads the survey, also said the outlook for future growth in the farm economy depends on whether the Federal Reserve raises interest rates again.

“That tends to push up the value of the dollar and tends to push down agricultural commodity prices,” he told Brownfield Ag News.

On the zero-to-100 index scale, 50 is considered growth neutral. This is the sixth straight month that the overall index has moved below growth neutral.

The confidence index, which reflects bankers’ expectations for the economy six months out, moved a point higher in February, but only to 30.4.

Goss is the the keynote speaker at the Association’s Spring Conference in Clearwater, Fla.  S