Healthy Farm Income Pushes Midwest Economy
OMAHA, Neb. (AP) — Strong farm earnings continue to bolster the economy in rural parts of 10 Midwest and Plains states, according to a new survey of bank CEOs released Thursday.
“Businesses heavily dependent on the farm economy continue to experience very strong economic conditions,” said Creighton University economist Ernie Goss, who oversees the survey of rural bankers.
The overall index for the Rural Mainstreet economic survey in December reached 55.4, its highest level since January 2008. The index is better than the November figure was 53.3, and much stronger than last December’s 40.9.
The index ranges between 0 and 100. A score above 50 suggests the economy will expand over the next six months. A score below 50 would suggest the economy will contract.
The farmland price index soared to 76.9 in December from November’s 68.1. And the farm equipment sales index also jumped to 77.8 in December from November’s 68.1.
“While the agricultural economy has been doing well, ag bankers and farmers need to be cautious as they look ahead to 2011 and beyond,” said Jeffrey Gerhart, the CEO of the Bank of Newman Grove in Nebraska.
Bankers from Colorado, Illinois, Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota, South Dakota and Wyoming are surveyed.
The December jobs index improved to 50.1 as area employers began to add jobs. That’s better than November’s 46.8.
Goss said many small towns that depend on agriculture are starting to see job prospects improve even as many metropolitan areas continue to lose jobs.
The bankers surveyed remain fairly confident about the economy with December’s index hitting 62.2, but that is slightly lower than November’s 63.8.
The survey suggested that loan volume jumped significantly in December as farmers completed land and equipment purchases. The December loan volume index hit 52.3. That’s up from November’s 35.3.
Home sales in the region remained weak as the December index declined to 43.9 from November’s 45.1.
Goss and Bill McQuillan, CEO of CNB Community Bank of Greeley, Neb., created the monthly economic survey in 2005. The survey index focuses on about 200 rural communities with an average population of 1,300.
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