Rural economic growth continues, factors create long-term concern

decrease font size  Resize text   increase font size       Printer-friendly version of this article Printer-friendly version of this article

Bubble Rural communities across the Midwest heavily dependent on agriculture and energy continue to see economic growth but at a slower rate than previous months.

Low interest rates provide some opportunities in rural economies, but low grain values continue to pull at economic confidence.

The monthly Rural Mainstreet Economy report shows growth continues, but moved 5.3 points lower on the monthly survey to 50.8. The index ranges between 0 and 100, with 50.0 representing growth neutral.

Index ratings were lower across most influential categories. Although bankers saw an improvement in checking deposits and CDs, all other major categories declined with many falling below 50 on the index.

Ernie Goss PhD., economist at Creighton University, explains how lower grain prices have had a major influence on lower equipment sales and farmland prices.

“Over the past year, corn, soybean and wheat prices have declined by 41 percent, 10 percent and 16 percent, respectively. Weaker farm prices are clearly negatively influencing the rural economy.”

Farmland prices on the index fell more than three points on the index to 43.8 in January. The monthly rate is over 27 points lower than a year earlier. Farm equipment sales continue to slide, falling an additional 3.3 points to 41.0 this month. Goss says the decline is explained by an eight percent drop in commodity prices for all farm products over the past year.

Area hiring, which had improved in the last month of 2013, fell 3.1 points in January to 53.8. Retail spending in rural communities also dipped this month, falling below 50 from 54.7 to 46.2 points on the index.

Despite the negative factors, Midwest bankers expect the economy to improve six months out. The confidence index improved by over two points, but remains growth negative at 49.2. The outlook is hampered by Washington’s inability to pass a five-year Farm Bill.

The monthly survey is a collection of responses from 199 bank executives in Colorado, Illinois, Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota, South Dakota and Wyoming.

Buyers Guide

Doyle Equipment Manufacturing Co.
Doyle Equipment Manufacturing prides themselves as being “The King of the Rotary’s” with their Direct Drive Rotary Blend Systems. With numerous setup possibilities and sizes, ranging from a  more...
A.J. Sackett Sons & Company
Sackett Blend Towers feature the H.I.M, High Intensity Mixer, the next generation of blending and coating technology which supports Precision Fertilizer Blending®. Its unique design allows  more...
R&R Manufacturing Inc.
The R&R Minuteman Blend System is the original proven performer. Fast, precise blending with a compact foot print. Significantly lower horsepower requirement. Low inload height with large  more...
Junge Control Inc.
Junge Control Inc. creates state-of-the-art product blending and measuring solutions that allow you to totally maximize operating efficiency with amazing accuracy and repeatability, superior  more...
Yargus Manufacturing
The flagship blending system for the Layco product line is the fully automated Layco DW System™. The advanced technology of the Layco DW (Declining Weight) system results in a blending  more...
Yargus Manufacturing
The LAYCOTE™ Automated Coating System provides a new level of coating accuracy for a stand-alone coating system or for coating (impregnating) in an automated blending system. The unique  more...
John Deere
The DN345 Drawn Dry Spreader can carry more than 12 tons of fertilizer and 17.5 tons of lime. Designed to operate at field speeds up to 20 MPH with full loads and the G4 spreader uniformly  more...
Force Unlimited
The Pro-Force is a multi-purpose spreader with a wider apron and steeper sides. Our Pro-Force has the most aggressive 30” spinner on the market, and is capable of spreading higher rates of  more...
BBI Spreaders
MagnaSpread 2 & MagnaSpread 3 — With BBI’s patented multi-bin technology, these spreaders operate multiple hoppers guided by independent, variable-rate technology. These models are built on  more...

Comments (0) Leave a comment 

e-Mail (required)


characters left

Tube Series (TS) Conveyors

USC’s Tube Series Conveyors combine the gentleness of the signature Seed Series with the traditional stability of a tube-style conveyor, ... Read More

View all Products in this segment

View All Buyers Guides

Feedback Form
Feedback Form