Rural Mainstreet Index: Farmland Prices Grow at Rapid Pace

For 17 straight months, the rural economy has posted healthy and consistent growth. That’s according to the April Rural Mainstreet Index (RMI) from Creighton University.

For Aril 2021, the RMI sits at 62. That is a small drop from March’s 65.4. The index ranges between 0 and 100 with a reading of 50 representing growth neutral and is generated by a monthly survey of bank CEOs in rural areas of a 10-state region dependent on agriculture and/or energy.

“The region recorded a 34% gain in farm commodity prices over the past 12 months, but low short-term interest rates and healthy farm income have underpinned the Rural Mainstreet Economy,” says Ernie Goss, who chairs Creighton’s Heider College of Business and leads the RMI.  

The region’s farmland price index for April climbed to a strong 80 from 78 in March. That marks the 19th straight month that the index has moved above growth neutral. Over the past several months, the RMI has registered the most consistent and strongest growth in farmland prices since the survey was launched in 2006. 

Here are the state-by-state April farmland price indexes: 

• Colorado: 81.5, up from 76.2 
• Illinois: 85.7, up from 79.1 
• Iowa: 78.5, down from 80.3 
• Kansas: 77, up from 73.6 
• Minnesota: 78.3, up from 77.4
• Missouri: 81.1, up from 80.1 
• Nebraska: 62.2, down from 78.2
• North Dakota: 82.6, up from 79.3
• South Dakota: 78, up from 75 
• Wyoming: 81.9, up from 79

This month bankers were asked to forecast the impact of President Biden’s emergency waiver on the summer production of E-15 ethanol. Fewer than 4 of 10 bankers, expect the move to have a positive impact. More than half (56.5%) expect the waiver to have little or no impact. 

On average, bank CEOs estimate 2.3% of farmers have been involved in cryptocurrency transactions in the past 12 months. 

More than 9 of 10 bankers expect the Federal Reserve interest rate setting committee to raise short-term interest rates by one-half of one percentage point at its next meeting on May 3-4. 

“The Federal Reserve has been behind in raising interest rates,” shared Jeffrey Gerhart, Chairman of the Bank of Newman Grove in Newman Grove, Neb.

Russia’s invasion of Ukraine, along with accompanying global trade tensions and surging inflation, pushed the business confidence index to its lowest level since the beginning of the pandemic in Spring 2020. The index, which reflects bank CEO expectations for the economy six months out, plummeted to 39.1 from 54 for March. 

The RMI, which started in 2005, represents an early snapshot of the economy of rural agricultural and energy-dependent portions of the nation. It focuses on 200 rural communities with an average population of 1,300.