The mood is subdued down on the farm, according to a survey of rural bankers.
For an eighth straight month, the overall Rural Mainstreet Index sank below growth neutral in April.
In a survey of bankers in 10 rural states dependent on agriculture or energy, the overall reading for April increased to 45.8 from 38 in March, according to a news release. The March reading was the index’s lowest level since June 2020. The index ranges from 0 to 100, with a reading of 50 representing growth neutral.
“Higher interest rates, weaker agriculture commodity prices and higher grain storage costs pushed the overall reading below growth neutral for the eighth straight month,” Ernie Goss, the Jack A. MacAllister chair in regional economics at Creighton University’s Heider College of Business, said in the release.
The 10-state region’s farmland price index rose to a solid 56.5 from March’s 56, and has remained above growth neutral for 53 consecutive months.
“Creighton’s survey continues to point to solid, but slowing, growth in farmland prices for 2024,” Goss said. “Approximately 17.4% of bankers reported that farmland prices expanded from March levels.”
Even with weaker farm conditions, only approximately 0.9% of bankers reported an upturn in farm loan delinquencies over the past six months, Goss said.
According to trade data from the International Trade Association, regional exports of agricultural goods and livestock for 2024 year-to-date were down 7.2% from the same period in 2023.
Rural bankers remain very pessimistic about economic growth for their area over the next six months, the survey said.
“Weak and falling agriculture commodity prices, farm exports and higher interest rates over the past several months continued to constrain banker confidence,” Goss said.
