The Creighton University Rural Mainstreet Index for March rose to its highest level since December of last year according to the monthly survey of bank CEOs in rural areas of a 10-state region dependent on agriculture and/or energy. Results came in, however, before the impact of regional flooding was fully felt.
The overall index expanded to 52.9 from 50.2 in February. This is the highest reading since December 2018, and the eleventh time in the past twelve months that the index has moved above growth neutral (50.0 on the RMI’s 0-100 scale).
The farmland and ranchland-price index for March slumped to 36.4 from February’s 42.2. This is the 64th straight month the index has fallen below growth neutral 50.0.
In terms of financial stress for farmers, 82.9 percent of bankers reported that the number one reaction to financial stress was restructuring loans. Another 14.3 percent indicated that farmers were slow paying their loans and 2.9 percent reported financially stressed farmers selling the farm to more economically viable farm operators.
Borrowing by farmers for March was strong, with the borrowing index climbing to 76.7 from February’s 71.3. The checking-deposit index increased to a still weak 42.4 from February’s 40.9, while the index for certificates of deposit and other savings instruments was essentially flat at 47.1.
“Our surveys over the last several months indicate the Rural Mainstreet economy is expanding outside of agriculture. However, the negative impacts of tariffs and low agriculture commodity prices continue to weaken the farm sector,” said Ernie Goss, PhD, Jack A. MacAllister Chair in Regional Economics at Creighton University’s Heider College of Business.
The confidence index, which reflects bank CEO expectations for the economy six months out, fell to an anemic 45.7 from February’s 48.5, indicating a pessimistic economic outlook among bankers.
“March floods, tariffs, trade tensions, and anemic farm income negatively influenced the economic outlook of bank CEOs,” Goss said.
RMI tracks responses from bank CEOs in rural areas of Colorado, Illinois, Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota, South Dakota and Wyoming.