Bankers Say Rural Economy Remains Strong in 10 States
The economy remains strong in rural parts of 10 Plains and Western states, but some of the bankers surveyed this month said they are worried about how inflation will affect farmers.
The overall index for the region slipped from November’s 67.7 reading but the report released last Thursday said the index remained firmly in positive territory at 66.7 for December. Any score above 50 suggests a growing economy, while a score below 50 suggests a shrinking economy.
Creighton University economist Ernie Goss said the region continues to benefit from low interest rates and strong exports.
The USDA estimates that agricultural exports are up 23% over last year. But the persistently high inflation is a concern as land costs and the price of supplies farmers need are expected to keep growing next year.
“Inflation is real and affecting folks in our service area,” said Jeff Bonnett, CEO of Havana State Bank in Havana, Illinois.
Yet the bank CEOs are optimistic about the next six months. The survey’s confidence index rose to 55.2 in December from November’s weak 48.4 reading.
Bankers from Nebraska, Iowa, Colorado, Illinois, Kansas, Minnesota, Missouri, North Dakota, South Dakota and Wyoming were surveyed.
The Nebraska index for December sank to 71.9 from November’s 74.1. The state’s farmland-price index climbed to 92.3 from last month’s 85.4. Nebraska’s new-hiring index improved to 71.8 from 70.8 in November. U.S. Bureau of Labor Statistics data indicate that Nebraska’s Rural Mainstreet economy has experienced a very healthy 3.7% gain in its nonfarm employment (non-seasonally adjusted).
“Our corner of the world saw dry conditions with yields about average. Where there was rain, yields were well above average,” said Jim Stanosheck, CEO of the State Bank of Odell, Nebraska.
Iowa’s index improved to 71.4 from 70.9 in November.
“Crop yields are amazing for the lack of moisture, except for very few instances depending on type of soil,” said Jim Brown, CEO of Hardin County Savings Bank in Eldora, Iowa.
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