Rural Mainstreet: Farm Equipment Index Improves

Results of Creighton University’s monthly survey of rural mainstreet provided reasons for optimism. The overall index improved from September, as did the farm equipment sales index. Both indices remain below growth neutral.

The Rural Mainstreet Index for October was 45.3, compared to 39.6 in September. The farm equipment sales index increased from 27.4 in September to 29.3 in October. The survey, which ranges between zero and 100, is considered growth neutral at 50.

The confidence index, which reflects expectations for the economy six months out, increased to 37 from 36.1 in September.

“Concerns about trade, especially current NAFTA negotiations, and low agriculture commodity prices, impaired bankers’ economic outlook for the month,” said Ernie Goss, who is the chair in regional economics at the Heider College of Business at Creighton University.

Goss said weak farm income and low commodity prices continue to drag on the agriculture economy.

The survey asked bankers to compare current spot prices for a bushel of corn to break even, and only 2.4 percent of bankers indicated that prices between $3.50 and $3.75 were above break even. Approximately 45.2 percent reported current spot prices were below break even.

The university’s monthly survey asks bank presidents and CEOs in agriculturally and energy-dependent portions of a 10-state region their thoughts on current economic conditions in their communities. The survey includes Colorado, Illinois, Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota, South Dakota and Wyoming.