This week, Creighton University released its August Rural Mainstreet Index. While the overall index climbed to 54.8 from 53.8 in July, the farm related categories demonstrate the impact tariffs are having on rural America.
“Surveys over the past several months indicate the Rural Mainstreet economy is expanding outside of agriculture. However, the negative impacts of recent trade skirmishes have begun to surface, weakening already anemic grain prices,” says Ernie Goss, Jack A. MacAllister Chair in Regional Economics at Creighton University’s Heider College of Business.
Part of the survey includes banker comments that influence the index.
“The tariffs have and are costing our ag customers on grain prices and items they must purchase,” says Jim Stanosheck, CEO of State Bank in Odell, Nebraska. “Talking to one of my customers this morning, he thought that maybe the tariffs would bring about better prices in the future.”
In reaction to weak farm income, nearly 31% of bank CEOs reported rejecting a higher percentage of farm loans. According to the index, farmer borrowing expanded for August, but at a slower pace than in July, as the loan-volume index declined to 72.2 from 76.9 that month. Surprisingly, the index for certificates of deposit and other savings instruments increased nearly 5 points from July, rising to 48.8.
For the 60th consecutive month the index for farm equipment sales stayed below growth neutral, 50, falling to 37.8 from July’s 38.8. In addition, bankers expect farm equipment sales to decline by 7.8% over the next year.