Economist Ernie Goss with Creighton University says his monthly survey of bank executives in 10 Midwestern states indicates the agricultural economy has hit a plateau and has dipped in Nebraska.
Goss says the value of the dollar is putting downward pressure on agricultural commodity prices.
Goss surveys rural bank executives in the ten states for The Rural Mainstreet Index.
“Coming in a bit weaker,” Goss says of the farm economy. “The agricultural sector having a difficult time right now, or at least certainly there’s more of a headwind than a tailwind.”
Farm income is expected to be down for the second year in a row, both row crop and livestock. The drop is hurting the sales and manufacturing of agricultural equipment.
“That’s affecting the dealers in these rural communities, but also the large manufacturers whether that’s John Deere or others and then, of course, the metal manufacturers that produce for the agricultural equipment manufacturers, so there’s a lot of weakness out there,” according to Goss.
Creighton’s Mainstreet Index was up slightly in Iowa, Minnesota, and Missouri. It slumped a bit in Nebraska, Illinois, Kansas, and the Dakotas.
Goss says bankers remain pessimistic about the short and intermediate prospects for agricultural producers and equipment dealers.
In September, farm and ranch land values dropped for the 22nd straight month. Farmland prices are declining by 6-7%.
In contrast, rural businesses keep adding jobs, but at a slower pace. Businesses in the rural parts of the Midwest had been increasing their workforce by 1.2%. That has dropped to 0.2%.
The Rural Mainstreet Index surveys bankers from Colorado, Illinois, Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota, South Dakota, and Wyoming, basing its assessments on 200 rural communities with an average population of 1,300.
Kay Henderson, Radio Iowa, contributed to this report.