Bankers survey: Rural economy stays strong in 10 states

OMAHA, Neb. — The economy in rural parts of 10 Plains and Western states remains strong, according to a new monthly survey of bankers in the region released today, but those bankers said they have growing concerns about the rising costs associated with running farms.

The overall Rural Mainstreet economic index fell in January to 61.1 from December’s 66.7. Any score above 50 suggests a growing economy, while a score below 50 suggests a shrinking economy.

“Solid grain prices, the Federal Reserve’s record-low short-term interest rates, and growing agricultural exports have underpinned the Rural Mainstreet Economy,” Creighton University economist Ernie Goss, who oversees the survey, said.

Bankers surveyed listed their top concern for farmers in 2022 as rising inflation that’s driving up the prices of farm supplies, from fuel to fertilizer. Disruptions of the delivery of farm supplies ranked second among bankers’ concerns, and rising interest rates ranked third.

“Inflation is a serious problem here,” Jim Eckert, president of the Anchor State Bank in Anchor, Illinois, said for the report. “Gasoline prices have nearly doubled since November 2020.”

Jim Brown, CEO of Hardin County Savings Bank in Eldora, Iowa, said that rising costs “have raised our average farmer break-even points,” but that current commodity prices have most farmers showing moderate gains.

Despite the concerns, bank CEOs are optimistic about the next six months. The survey’s confidence index rose to 61.1 from December’s 55.2.

Bankers from Colorado, Illinois, Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota, South Dakota and Wyoming were surveyed.