Mainstreet Economy

Rural Mainstreet on Strong Growth Path: Farmland Prices Expanding Rapidly

April Survey Results at a Glance:

  • Overall index dipped but remained in strong growth territory from March’s record high.
  • The farmland price index advanced its highest level since November 2012.
  • The farm equipment-sales index rose to its highest reading since February 2013.
  • Housing index soars to record level with bids above listing prices.
  • Lack of available workers is restraining job growth.
  • Approximately 9.1% of farmland sales over past six months have gone to nonfarmer investors.
  • Fully 100% of bank CEOs indicated that export markets were important, or very important, to their local economy.

OMAHA, Neb. (April 15, 2021) – For the fifth straight month, the Creighton University Rural Mainstreet Index (RMI) climbed above growth neutral. According to the monthly survey of bank CEOs in rural areas of a 10-state region dependent on agriculture and/or energy.

Overall: The overall index for April slipped to a still healthy 69.0 from a record high 71.9 in March. The index ranges between 0 and 100 with a reading of 50.0 representing growth neutral.

Approximately, 37.9% of bank CEOs reported that their local economy expanded between March and April.

“Strong growth in grain prices, the Federal Reserve’s record-low interest rates, and growing exports have underpinned the Rural Mainstreet Economy. Even so, current rural economic activity remains below pre-pandemic levels,” said Ernie Goss, PhD, Jack A. MacAllister Chair in Regional Economics at Creighton University's Heider College of Business.

Fully 100% of bank CEOs indicated that export markets were important, or very important, to their local economy.

Farming and ranching: For a seventh straight month, the farmland price index advanced above growth neutral. The April reading climbed to 78.6, its highest level since 2012, and up from 71.9 in March. This is first time since 2013 that Creighton’s survey has recorded seven straight months of farmland prices above growth neutral.

Bankers reported that approximately 9.1% of farmland sales over past six months have gone to nonfarmer investors.

The April farm equipment-sales index rose to 67.5, its highest level since 2013, and up from March’s very strong 63.5. After 86 straight months of readings below growth neutral, farm equipment sales bounced into growth territory for the last five months.

Banking: The April loan volume index dipped to 58.5 from March’s 60.9. The checking-deposit index soared to a record high 89.3 from March’s 84.4, while the index for certificates of deposit, and other savings instruments, declined to 44.6 from 46.9 in March.

Hiring: The new hiring index sank to a strong 62.5 from 72.9 in March. Despite recent solid job gains for the region, data from the U.S. Bureau of Labor Statistics indicate that nonfarm employment levels for the Rural Mainstreet economy are down by 184,000 (nonseasonally adjusted), or 4.2%, compared to pre-COVID-19 levels.

According to Jim Stanoscheck, CEO of the State Bank of Odell in Odell, Nebraska, positions available exceed the number of qualified workers looking for a job. “As result, it will take many months of above growth neutral readings to get back to pre-COVID-19 employment levels for the region,” said Goss.

Confidence: The confidence index, which reflects bank CEO expectations for the economy six months out, fell to a very healthy 72.4 from 76.7 in March. “Federal stimulus checks, improving gain prices, and advancing exports have supported confidence offsetting negatives from pandemic ravaged retail and leisure and hospitality companies in the rural economy,” said Goss.

Home and retail sales: The home-sales index climbed to a record 78.6 from March’s 76.6. The retail-sales index for April increased to a strong 62.1 from March’s healthy 57.8. “Creighton’s survey will have to record many months above growth neutral retail numbers before it can be concluded that Rural Mainstreet retailers are truly rebounding,” said Goss.

Steve Simon, CEO of South Story Bank in Huxley, Iowa attests to housing strength saying, “The local housing market is on fire with most sales having multiple bids and selling for over list price.”

Each month, community bank presidents and CEOs in nonurban agriculturally and energy-dependent portions of a 10-state area are surveyed regarding current economic conditions in their communities and their projected economic outlooks six months down the road. Bankers from Colorado, Illinois, Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota, South Dakota and Wyoming are included.

This survey represents an early snapshot of the economy of rural agriculturally and energy-dependent portions of the nation. The Rural Mainstreet Index (RMI) is a unique index covering 10 regional states, focusing on approximately 200 rural communities with an average population of 1,300. It gives the most current real-time analysis of the rural economy. Goss and Bill McQuillan, former chairman of the Independent Community Banks of America, created the monthly economic survey in 2005 and launched in January 2006.

Below are the state reports:

Colorado: Colorado’s Rural Mainstreet Index (RMI) for April slipped to 66.7 from 70.0 in March. The farmland and ranchland-price index increased to 71.7 from February’s 50.9. Colorado’s hiring index for April declined to 62.4 from March’s 72.0. Despite recent solid job gains, U.S. Bureau of Labor Statistics data indicate that Colorado’s Rural Mainstreet nonfarm employment remains more than 24,000 jobs, or 7.1%, below its pre-COVID-19 level.

Illinois: The April RMI for Illinois advanced to 69.8 from 68.6 in March. The farmland-price index jumped to 77.8 from 71.0 in March. The state’s new-hiring index fell to 62.7 from 71.3 in March. Despite recent solid job gains, U.S. Bureau of Labor Statistics data indicate that Illinois’ Rural Mainstreet nonfarm employment remains more than 65,000 jobs, or 4.9%, below its pre-COVID-19 level

Iowa: The April RMI for Iowa decreased to 69.8 from March’s 71.6. Iowa’s farmland-price index rose to 78.6 from 72.4 in March. Iowa’s new-hiring index for April fell to 63.5 from 72.7 in March. Despite recent solid job gains, U.S. Bureau of Labor Statistics data indicate that Iowa’s Rural Mainstreet nonfarm employment remains more than 27,000 jobs, or 4.2%, below its pre-COVID-19 level.

Kansas: The Kansas RMI for April dropped to 72.2 from 74.5 in March. The state’s farmland-price index climbed to 80.2 from March’s 73.9. The new-hiring index for Kansas declined to 65.1 from 74.2 in March. Despite recent solid job gains, U.S. Bureau of Labor Statistics data indicate that Kansas’ Rural Mainstreet nonfarm employment remains more than 13,000 jobs, or 3.2%, below its pre-COVID-19 level.

Minnesota: The April RMI for Minnesota tumbled to 67.9 from 69.2 in March. Minnesota’s farmland-price index climbed to 78.0 from 71.2 in March. The new-hiring index for April dropped to 62.9 from 71.5 in March. Despite recent solid job gains, U.S. Bureau of Labor Statistics data indicate that Minnesota’s Rural Mainstreet nonfarm employment remains more than 16,000 jobs, or 3.3%, below its pre-COVID-19 level.

Missouri: The April RMI for Missouri fell to 77.4 from March’s 79.7. The farmland-price index expanded to 82.8 from March’s 76.5. The state’s hiring gauge declined to 67.7 from 76.8 in March. Despite recent solid job gains, U.S. Bureau of Labor Statistics data indicate that Missouri’s Rural Mainstreet nonfarm employment remains more than 4,000 jobs, or 1.4%, below its pre-COVID-19 level.

Nebraska: The Nebraska RMI for April slipped to 77.1 from March’s 78.8. The state’s farmland-price index rocketed to 82.6 from last month’s 76.1. Nebraska’s new-hiring index declined to 67.5 from 78.4 in March. Despite recent solid job gains, U.S. Bureau of Labor Statistics data indicate that Nebraska’s Rural Mainstreet nonfarm employment remains more than 800 jobs, or 0.3%, below its pre-COVID-19 level.

North Dakota: The North Dakota RMI for April decreased to 55.0 from March’s 57.0. The state’s farmland-price index expanded to 71.6 from 65.2 in March. The state’s new-hiring index slumped to 56.5 from March’s 65.5. Despite recent solid job gains, U.S. Bureau of Labor Statistics data indicate that North Dakota’s Rural Mainstreet nonfarm employment remains more than 18,000 jobs, or 11.4%, below its pre-COVID-19 level.

South Dakota: The April RMI for South Dakota advanced to 77.2 from March’s 76.6. The state’s farmland-price index climbed to 81.4 from 74.9 in March. South Dakota’s April hiring index dropped to 66.3 from 75.2 in March. Despite recent solid job gains, U.S. Bureau of Labor Statistics data indicate that South Dakota’s Rural Mainstreet nonfarm employment remains almost 4,000 jobs, or 1.8%, below its pre-COVID-19 level.

Wyoming: The April RMI for Wyoming tumbled to 67.7 from March’s 81.9. The April farmland and ranchland-price index expanded to 77.9 from 77.6 in March. Wyoming’s new-hiring index dropped to 62.8 from March’s 77.9. Despite recent solid job gains, U.S. Bureau of Labor Statistics data indicate that Wyoming’s Rural Mainstreet nonfarm employment remains more than 10,000 jobs, or 5.2%, below its pre-COVID-19 level.

Next month’s survey results will be released on the third Thursday of the month, May 20.

Tables 1 and 2 summarize the survey findings.