Farm Equipment Index Hits Highest Mark Since 2013
For the first time since April of this year, the Creighton University Rural Mainstreet Index (RMI) declined.
The overall index for November sank below growth neutral to 46.8 from October’s 53.2.
In spite of that broader decline, the November farm equipment-sales index increased to 42.9, its highest level since December 2013, and up from 37.9 in October. The index ranges between 0 and 100 with 50 representing growth neutral.
“Recent improvements in agriculture commodity prices, federal farm support payments, and the Federal Reserve’s record low interest rates have underpinned the Rural Mainstreet Economy. Still, only 6.5 percent of bankers reported improvements from October, while 12.9 percent detailed economic pullbacks for the month,” said Ernie Goss, PhD, chair of regional economics at the university.
This month bankers were asked to forecast the share of grain farmers likely to experience negative cash flow for 2021. Bankers expect 9.2 percent of grain farmers’ cash expenses to exceed cash revenue. This is an improvement from 2019 when bankers projected 12.4 percent of farmers to experience negative cash flows in 2020.
The confidence index, which reflects bank CEO expectations for the economy six months out, dipped to 50 from October’s 51.6.
Each month, Creighton University surveys community bank presidents and CEOs in agriculturally and energy-dependent portions of a 10-state area.