Farm economy sentiment faded in December, losing the “Trump bump” that followed the November election, according to a Rural Mainstreet Index survey from Creighton University.
After advancing above growth neutral last month for the first time since July 2023, the overall Rural Mainstreet Index sank below a reading of 50 in December, according to the monthly survey of bank CEOs in rural areas of a 10-state region dependent on agriculture and/or energy.
The region’s overall reading for December plummeted to 39.6 from November’s much stronger 50.2, according to the survey. The index ranges between 0 and 100, with a reading of 50 representing growth neutral.
“In retrospect, and based on bank CEO comments, there appears to have been a significant November upturn resulting from the surprising Trump election results,” Ernie Goss, Jack A. MacAllister chair in regional economics at Creighton University’s Heider College of Business, said in a news release. “That positive bump disappeared in December as continuing weak grain prices and farm income losses weighed on a significant proportion of farmers in the region.”
Highlights of the report include:
- For the 11th time in 2024, the Rural Mainstreet Index dropped below growth neutral.
- For the seventh time in the past eight months, farmland prices sank.
- Farm equipment sales dropped for the 17th straight month.
- On average, farm loan delinquency rates rose by only 1.2% over the past six months.
- Approximately 1 in 5 bank CEOs expect a recession in 2025.
- Roughly 21.7% of bankers indicated that their bank had raised credit standards over the past 12 months.
- The farm equipment sales index slumped to 14.3, its lowest level since October 2016 and down from 14.6 in November.
“This is the 17th straight month that the index has fallen below growth neutral,” Goss said. “High borrowing costs, tighter credit conditions and weak farm commodity prices are having a negative impact on the purchases of farm equipment.”
