Farmland prices have soared to a record level, according to Creighton University’s November Rural Mainstreet Economy report.
Creighton’s Rural Mainstreet Index remained above growth-neutral for the 12th straight month, signaling expectations for healthy regional growth. Bankers anticipate holiday and Christmas sales will grow by 5.7 percent from the previous year in their areas.
The RMI, which gauges the sentiments of bank CEOs in rural areas of a 10-state region, increased to 67.7 from 66.1 in October on a 100-point scale. A reading of 50 indicates growth-neutral expectations. The index increased in Illinois, Iowa, Kansas, Minnesota, Missouri, Nebraska and South Dakota, and decreased in Colorado, North Dakota and Wyoming.
“Solid grain prices, the Federal Reserve’s record-low interest rates, and growing exports have underpinned the Rural Mainstreet Economy,” said Ernie Goss, Jack A. MacAllister chair in regional economics at Creighton’s Heider College of Business. “USDA data show that 2021 year-to-date agriculture exports are more than 25.4 percent above that for the same period in 2020. This has been an important factor supporting the Rural Mainstreet economy.” The confidence index, reflecting bank CEO expectations for the economy six months out, dropped to 48.4, its lowest level since August 2020.
Other report findings included:
- The November loan volume index fell to 53.2 from 53.6 the previous month. The checking-deposit index increased to 71 from 66.1 in October.
- Sparked by labor shortages, the new hiring index dropped to 67.7 from 71.4 in October.
- The home-sales index sank to 65 from 73.2 in October. The retail-sales index climbed to 58.1 from 55.4 in October. “Healthy farm prices and federal stimulus spending are having very positive impacts on Rural Mainstreet retail sales and home sales,” Goss said.