The Rural Mainstreet Index decreased for the first time since the pandemic began, when April’s measure plunged to a record low 12.1. The November reading on the 100-point index sank below growth neutral to 46.8 from October’s 53.2.
Bankers reported record low loan volumes, with the November loan volume index falling to its lowest since the survey began in 2006. The lending index slumped to 25.8 from October’s 46.8. The checking-deposit index soared to a record-high 87.1 from 66.1 in October, while the index for certificates of deposit, and other savings instruments rose to 46.8 from 38.7 in October.
Respondents expect a tenth of grain farmers’ cash expenses to exceed cash revenue. This is an improvement from 2019 when bankers projected 12.4 percent of farmers to experience negative cash flows for 2020.
For a second straight month, the farmland-price index advanced above growth neutral. The November reading jumped to 55.0 from October’s 50.6, the first time since 2013 it has recorded back-to-back increases.
The November farm equipment-sales index increased to 42.9, its highest level since December 2013, and up from 37.9 in October. It continues, however, a years-long trend of below-growth-neutral figures.
“Recent improvements in agriculture commodity prices, federal farm support payments and [the] Federal Reserve’s record low interest rates have underpinned the Rural Mainstreet Economy,: said Ernie Goss, Jack A. MacAllister Chair in Regional Economics at Omaha-based Creighton University. “Still, only 6.5 percent of bankers reported economic improvements from October, while 12.9 percent detailed economic pullbacks for the month.”
The RMI surveys community bank presidents and CEOs each month in nonurban agriculturally and energy-dependent areas regarding current and projected economic conditions in their communities. Bankers come from about 200 small towns with an average population of 1,300 in 10 states: Colorado, Illinois, Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota, South Dakota and Wyoming.