A Creighton University survey of rural bank CEOs in Iowa and other Midwest states finds views of the economy sinking for the fifth time in the past six months.
Creighton’s “Rural Mainstreet Index” last month rose to its highest level in three years, but this month it has dropped nearly 10 points in the region and nearly 11 points in Iowa. Creighton economist Ernie Goss, who directs the survey, said over half of the bank executives surveyed cited weak commodity prices as the greatest challenge to the rural economy. “The farmers out there and ranchers are seeing what they’re paying out is exceeding what they’re getting in,” Goss said. “It’s a lot of below break-even for a lot of these farmers and ranchers, so of course that’s obviously not very good.”
And Goss said the war in Iran is impacting farmers’ input costs. “While oil has been very volatile up and down, the price of…diesel fuel which is a very important cost component for farmers is staying up there,” Goss said. “It’s really a real problem for the farmers and ranchers out there.”
The index found home and retail sales in the Midwest are falling, with farm equipment sales in particular very weak. “We’re talking about, of course, higher tariffs on steel and aluminum coming from Canada and, of course, the equipment manufacturers buy alumninum and steel and it goes into the agricultural equipment and farmers are taking a wait and see approach,” Goss said. “It’s hard to expect farmers to be buying.”
The Rural Mainstreet Index found a slight decline in Iowa agland prices, but a slight uptick in Iowa’s job market.
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