Mainstreet Economy

Rural Mainstreet Economy Surging: Farmland Prices Climb to Record High

November Survey Results at a Glance:

  • Overall index moved above growth neutral for the 12th straight month indicating healthy growth for the region.
  • The farmland price index rocketed to a record high.
  • On average, bankers expect holiday and Christmas sales in their area to expand by 5.7% from the same period last year.
  • Approximately 30% of bank CEOs expect the recently passed infrastructure bill to have more negatives than positives for agriculture.
  • Approximately 26.7% of bankers ranked the broadband connectivity portion of the infrastructure bill to have the greatest impact on their local economy.
  • Despite recent strong job gains, U.S. Bureau of Labor Statistics data indicate that compared to its pre-COVID-19 level, Rural Mainstreet has lost 2.5% of its nonfarm employment (non-seasonally adjusted).

OMAHA, Neb. (Nov. 18, 2021) – For the 12th straight month, the Creighton University Rural Mainstreet Index (RMI) remained 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 region’s overall reading for November rose to 67.7 from October’s 66.1. The index ranges between 0 and 100 with a reading of 50.0 representing growth neutral.

“Solid grain prices, the Federal Reserve’s record-low interest rates, and growing exports have underpinned the Rural Mainstreet Economy. USDA data show that 2021 year-to-date agriculture exports are more than 23.2% above that for the same period in 2020. This has been an important factor supporting the Rural Mainstreet economy,” said Ernie Goss, PhD, Jack A. MacAllister Chair in Regional Economics at Creighton University’s Heider College of Business.

“More than eight of 10 bankers expect, if implemented, the stepped-up basis portion of President Biden’s $3.5 trillion bill before Congress to have a negative impact on the Rural Mainstreet economy,” said Goss.

Farming and ranching: The region’s farmland price index improved to a very strong, and record high of 85.5 from October’s 81.5. October’s reading represented the 15th straight month that the index has moved above growth neutral.

Jim Eckert, president of Anchor State Bank in Anchor, Illinois, said, “Harvest started well, but was delayed by rains in October. Corn harvest is now nearly complete, but lots of soybeans remain to be combined.

The November farm equipment-sales index slipped to a strong 62.1 from 64.8 in October. Readings for farmland prices and equipment sales over the last several months represent the strongest consistent growth since 2012.

Banking: The November loan volume index slipped to 53.2 from October’s 53.6. The checking-deposit index advanced to 71.0 from October’s 66.1, while the index for certificates of deposit, and other savings instruments increased to 32.3 from a very weak 32.1 in October.

Hiring: The new hiring index dropped to a still robust 67.7 from 71.4 in October. Labor shortages continue to be a significant issue for Rural Mainstreet businesses.

Despite recent strong job gains, U.S. Bureau of Labor Statistics data indicate that, compared to its pre-COVID-19 level, Rural Mainstreet has lost 2.5% of its nonfarm employment (non-seasonally adjusted).

Confidence: The confidence index, which reflects bank CEO expectations for the economy six months out sank for the fifth straight month to 48.4, its lowest level since August of last year, and down from October’s 51.8.

Home and retail sales: The home-sales index sank to a healthy 65.0 from October’s 73.2. The retail-sales index for November 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,” said Goss.

This month the Creighton survey asked bank CEOs to estimate holiday and Christmas retail sales in their area. On average, bankers expect holiday and Christmas sales to expand by 5.7% from the same period last year.

The 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 November declined to 64.1 from October’s 65.7. The farmland and ranchland-price index expanded to 83.6 from 82.0 in October. Colorado’s hiring index for November declined to 67.2 from 70.3 in October. Despite recent strong job gains, U.S. Bureau of Labor Statistics data indicate that compared to its pre-COVID-19level, Colorado’s Rural Mainstreet has lost 5.0% of its nonfarm employment (non-seasonally adjusted).

Illinois: The November RMI for Illinois climbed to 74.5 from 68.6 in October. The farmland-price index advanced to 85.5 from 82.8 in October. The state’s new-hiring index decreased to 70.9 from October’s 71.1. Despite recent strong job gains, U.S. Bureau of Labor Statistics data indicate that compared to its pre-COVID-19 level, Illinois’ Rural Mainstreet has lost 2.9% of its nonfarm employment (non-seasonally adjusted).

Iowa: The November RMI for Iowa improved to 70.9 from 65.4 in October. Iowa’s farmland-price index jumped to 84.9 from October’s 81.9. Iowa’s new-hiring index for November sank to 69.6 from 70.2 in October. Despite recent strong job gains, U.S. Bureau of Labor Statistics data indicate that compared to its pre-COVID-19 level, Iowa’s Rural Mainstreet has lost 2.6% of its nonfarm employment (non-seasonally adjusted).

Kansas: The Kansas RMI for November advanced to 64.1 from 59.0 in October. The state’s farmland-price index rose to 83.6 from October’s 80.1. The new-hiring index for Kansas declined to 67.2 from 68.4 in October. Despite recent strong job gains, U.S. Bureau of Labor Statistics data indicate that compared to its pre-COVID-19 level, Kansas’ Rural Mainstreet has lost 1.7% of its nonfarm employment (non-seasonally adjusted).

Minnesota: The November RMI for Minnesota rose to 83.9 from 73.6 in October. Minnesota’s farmland-price index climbed to 87.2 from October’s 83.7. The new-hiring index for November climbed to 74.3 from 72.0 in October. Compared to its pre-COVID-19 level, recent strong job gains for Minnesota’s Rural Mainstreet economy has generated a 0.8% gain in its nonfarm employment (non-seasonally adjusted).

Missouri: The November RMI for Missouri increased to 52.5 from 48.2 in October. The farmland-price index climbed to 81.5 from October’s 77.0. The state’s hiring gauge dipped to 62.9 from October’s 65.3. Compared to its pre-COVID-19 level, recent strong job gains for Missouri’s Rural Mainstreet economy has generated a 0.3% gain in its nonfarm employment (non-seasonally adjusted).

Nebraska: The Nebraska RMI for November rose to 74.1 from October’s 66.8. The state’s farmland-price index fell to 85.4 from last month’s 87.3. Nebraska’s new-hiring index improved to 70.8 from 70.6 in October. Compared to its pre-COVID-19 level, recent strong job gains for Nebraska’s Rural Mainstreet economy has generated a 1.3% gain in its nonfarm employment (non-seasonally adjusted).

North Dakota:The North Dakota RMI for November decreased to 57.8 from 59.1 in October. The state’s farmland-price index advanced to 82.7 from 80.1 in October. The state’s new-hiring index declined to 65.3 from October’s 68.4. Despite recent strong job gains, U.S. Bureau of Labor Statistics data indicate that compared to its pre-COVID-19 level, North Dakota’s Rural Mainstreet has lost 11.7% of its nonfarm employment (non-seasonally adjusted).

South Dakota: The November RMI for South Dakota expanded to 67.5 from 66.3 in October. The state’s farmland-price index expanded to 84.2 from 82.2 in October. South Dakota’s November hiring index decreased to 68.4 from 70.5 in October. Despite recent strong job gains, U.S. Bureau of Labor Statistics data indicate that compared to its pre-COVID-19 level, South Dakota’s Rural Mainstreet has lost 2.1% of its nonfarm employment (non-seasonally adjusted).

Wyoming: The November RMI for Wyoming increased to 61.9 from 60.7 in October. The November farmland and ranchland-price expanded to 83.2 from 80.6 in October. Wyoming’s new-hiring index declined to 66.4 from October’s 68.9. Despite recent strong job gains, U.S. Bureau of Labor Statistics data indicate that compared to its pre-COVID-19 level, Wyoming’s Rural Mainstreet has lost 7.7% of its nonfarm employment (non-seasonally adjusted).

Tables 1 and 2 summarize the survey findings. Next month’s survey results will be released on the third Thursday of the month, Dec. 16.

Tables 1 and 2 summarize the survey findings.