Farmland prices continue to increase at the fastest rate in more than 15 years, according to Creighton University’s monthly survey of bank CEOs.
The report’s Farmland Price Index climbed two points to 80 this month, the 19th straight month it has climbed above growth-neutral. Creighton’s equipment sales index declined five points from March but remains strong at 67. The index ranges from 0-100; any reading above 50 is positive.
Ernie Goss, Jack A. MacAllister chair in regional economics at Creighton University’s Heider College of Business, noted the region’s 34 percent increase in farm commodity prices over the past 12 months, coupled with low short-term interest rates and strong farm income, have been the basis of the strong economy.
Key banking indices fell: Loan volumes dipped 10 points to 51, the checking-deposit index dropped 12 points to 66, and the index for certificates of deposit and other savings instruments slipped one point to 39. “Strong farmer cash positions pushed the borrowing index much lower than I anticipated,” Goss said.
Other key report findings included:
- The Rural Mainstreet Economic Index fell three points to 62 this month, indicating positive economic growth for the 17th straight month.
- Russia’s war in Ukraine, the accompanying global trade uncertainty, and surging inflation plunged business confidence 15 points to 39, indicating the lowest banker confidence levels since the pandemic began.
- More than half of bankers expect President Joe Biden’s emergency waiver of summer ethanol E-15 to have little or no impact, according to the report. The vast majority of bankers anticipate the Federal Reserve to raise short-term interest rates by one-half of one percentage point early next month.
- Even though businesses still face labor shortages, the U.S. Bureau of Labor Statistics revealed that over the last 12 months, nonfarm employment in the Rural Mainstreet region increased by 4.5 percent.
The index covers approximately 200 rural communities with an average population of 1,300. The 10-state region includes Colorado, Illinois, Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota, South Dakota and Wyoming.