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September Rural Mainstreet Index Reaches 2017 Low
USAgNet - 09/25/2017

The Creighton University Rural Mainstreet Index fell to its lowest level for 2017, and remained below growth neutral for September, according to the latest monthly survey of bank CEOs in rural areas of a 10-state region dependent on agriculture and/or energy.

Overall: The index, which ranges between 0 and 100, slumped to 39.6, its lowest level since December 2016, and down from 42.2 in August.

"As a result of weak farm income, more than one-half, or 51.2 percent of bankers, reported restructuring farm loans while approximately 18.6 percent indicated their bank had increased collateral requirements. Despite weak farm income bank CEOs reported a low 2.1 percent increase in farm loan defaults, and a 4.1 percent rise in farm loan delinquencies," said Ernie Goss, Jack A. MacAllister Chair in Regional Economics at Creighton University's HeiderCollege of Business.

According to Jeffrey Gerhart, president and chairman of the Bank of Newman Grove in Newman Grove, Nebraska, "For grain farmers we won't know the shortfalls until after harvest depending on yields & prices. For those farmers who have a shortfall, we will work with them in order to help their operations make it through the rough times."

Farming and ranching: The farmland and ranchland-price index for September slumped to 39.6 from 43.0 in August. This is the 46th straight month the index has fallen below growth neutral 50.0.

Moisture conditions across the region are producing a wide range of yields. For example,Bryan Grove, president of American State Bank in Grygla, Minn. said, "Soybean harvest is just beginning with mixed results. Areas that received timely rains should have an average crop. Isolated locations lacking moisture will likely have disappointing soybean yields. Corn will have similar variability."

The September farm equipment-sales index increased to 27.4 from 25.6 in August. This marks the 49th consecutive month the reading has dropped below growth neutral 50.0.


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