The rural Midwestern economy is growing at a slightly faster rate than a month ago, according to a survey of bankers, and rent on farmland may increase only a bit in the coming year.
Snowstorms that killed an estimated 25,000 head of cattle and falling grain prices — close to the break-even price for some farmers — are among the negative economic factors in the region, Creighton University economist Ernie Goss said Thursday.
The survey produced an October Rural Mainstreet Index of 54.3, up from 52.4 in September. Index numbers higher than 50 indicate growth.
Goss and Greeley, Neb., banker Bill McQuillan originated the index, which is based on surveys of bankers in Colorado, Illinois, Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota, South Dakota and Wyoming.
The bankers' outlook index for the region's economy in six months declined to 44.7, indicating a potential slump ahead.
Goss said the bankers, on average, expect farmland rents to increase by 2.5 percent over the coming year, compared with the 9.3 percent increase they had predicted six months ago.
The survey's farmland price index fell to 50.9, its lowest since January 2010 and its 10th decline in the past 11 months. But some sales are still setting records, including a recent price of $17,600 per acre in Grundy County in east-central Iowa.
The farm equipment sales index was 44.6, the lowest since March 2010, as farmers pull back on big-ticket purchases, Goss said.
The hiring index unexpectedly increased because of growth by businesses outside agriculture.
The survey was taken shortly before the federal government ended its partial shutdown, a factor that may have pushed down the index's results, Goss said.
Nebraska's index was 54.9, the ninth month in a row indicating growth. The state's farmland index was 45.5, down from 48.1 in September.
Iowa's index was 55.3, up from 53.4 in September, with a farmland price index of 50.6, down from 53.2 in September.
The figures are from a survey of bank executives in rural and non-urban areas of Colorado, Illinois, Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota, South Dakota and Wyoming
|Ag land prices||54||50.9|
An index of 50 is neutral. Higher numbers show expansion, and lower numbers show decline. The forecast predicts economic activity in six months.