A monthly survey of bank executives in rural communities dependent upon agriculture or energy confirms what farm equipment manufacturers know: Sales are booming.
Creighton University’s Rural Mainstreet Index assesses a series of economic factors, such as hiring, home and retail sales, farmland values, and farm equipment sales. A number above 50 represents growth. A number below means economic contraction.
The farm equipment sales index in June was 71.6, the greatest growth it has shown since 2012. After 86 straight months of readings below growth neutral, farm equipment sales bounced into growth territory for the last seven months.
The overall Rural Maintreet Index for June was 70, which was a decrease from May but still strong. About 47 percent of bank CEOs reported their economies expanded from May to June.
“Strong grain prices, the Federal Reserve’s record-low interest rates, and growing exports have underpinned the Rural Mainstreet Economy,” said Ernie Goss, chair of regional economics at Creighton University’s Heider College of Business. “Even so, current rural economic activity remains below pre-pandemic levels.”
Bankers were asked to name the greatest threat to bank operations in 2021 and 2022. About one in four said a downturn in farm income. Another one in four said a rise in government regulations.
“In my view, $29 trillion in total debt with no real plan to reduce that debt, or balance the annual budget, is the biggest threat to our economy’s success,” said survey respondent Larry Winum, a bank CEO in Glenwood, Iowa.