Harting Sales and Service, Inc

Minnesota Ag News Headlines
November Rural Mainstreet Index Rises to Highest Reading for '19
Minnesota Ag Connection - 11/22/2019

The Creighton University Rural Mainstreet Index (RMI) for November climbed above growth neutral for the fourth time in the past five months, according to the monthly survey of bank CEOs in rural areas of a 10-state region dependent on agriculture and/or energy.

Overall: The overall index rose to 54.2 from 51.4 in October. Although still tepid, this is the highest reading for 2019. It also marked the fourth time in the past five months that the overall index rose above growth neutral.

-Federal agriculture crop support payments and somewhat higher grain prices have boosted the Rural Mainstreet Index slightly above growth neutral for the month. Given a continued weak rural economy, bank CEOs, on average, expect holiday buying to increase by only 1.3% above last year's levels,- said Ernie Goss, PhD, Jack A. MacAllister Chair in Regional Economics at Creighton University's Heider College of Business.

Jeff Bonnett, president of Havana National Bank in Havana, Illinois, reported that, -The latest harvests are showing significant declines in test weights leading to the point that 2019 harvest production looks to be running below average.- Bonnett goes on to say that grain prices are still sitting at extremely low levels for such yields.

Farming and ranching: The farmland and ranchland-price index for November increased slightly to a weak 40.4 from October's 40.3. This is the 72nd straight month the index has remained below growth neutral 50.0.

The November farm equipment-sales index declined to 37.5 from October's 39.7. This marks the 74th month the reading has remained below growth neutral 50.0.

Banking: Borrowing by farmers weakened significantly for November. The borrowing index slumped to 51.4 from October's very strong 68.9 and last November's 60.1. The checking-deposit index advanced to 68.1 from October's 60.8, while the index for certificates of deposit and other savings instruments increased to 51.4 from 50.0 in October.

Bankers reported that approximately 16.7% of farmers and 5.5% of business owners in their area had no organization succession plan.

Hiring: The employment gauge expanded to a very strong 65.3 from October's healthy 59.7. Despite the trade war and flooding over the past several months, Rural Mainstreet businesses continue to hire at a solid pace.

Over the past 12 months, the Rural Mainstreet economy added jobs at a 0.9% pace, or well below the pace of urban area growth of 1.1% for the same period. Rural areas of two Mainstreet states, Missouri, and Nebraska, lost jobs over the past 12 months.

Confidence: The confidence index, which reflects bank CEO expectations for the economy six months out, increased to a still weak 44.4 from October's 36.5, and continues to indicate a very negative economic outlook among bankers. -The trade war with China and the lack of passage of the USMCA (NAFTA's replacement) are driving confidence and the economic outlook lower for most areas of the region,- said Goss.

Said Joseph Anglin, CFO of the Pioneer Bank & Trust in Black Hills, South Dakota, -The Democrats impeachment debacle is putting a negative damper on the country and hurting peoples' outlook. Hopefully when their process is done, our customers outlook will improve again from the current damper.-

Home and retail sales: The home-sales index climbed to a healthy 55.7 from October's 54.2. The retail sales index for November increased to 50.0 from 47.2 in October.

This month bankers were asked to project the change in holiday retail sales from last year's buying season. On average, bankers expect a 1.3% expansion with 17.1% of bankers anticipating a decline in retail sales from last year.

Each month, community bank presidents and CEOs in nonurban agriculturally and energy-dependent portions of a 10-state area are surveyed regarding current economic conditions in their communities and their projected economic outlooks six months down the road. Bankers from Colorado, Illinois, Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota, South Dakota and Wyoming are included.

This survey represents an early snapshot of the economy of rural agriculturally and energy-dependent portions of the nation. The Rural Mainstreet Index (RMI) is a unique index covering 10 regional states, focusing on approximately 200 rural communities with an average population of 1,300. It gives the most current real-time analysis of the rural economy. Goss and Bill McQuillan, former chairman of the Independent Community Banks of America, created the monthly economic survey in 2005.

The November RMI for Minnesota advanced to 55.3 from October's 52.7. Minnesota's farmland-price index was unchanged from October's 40.5. The new-hiring index for November climbed to 64.6 from October's 60.1. Over the past 12 months rural areas in Minnesota have experienced job growth of 1.2% compared to job losses amounting to minus 0.1% for urban areas of the state.

Send this article to a friend

Other Minnesota Headlines
Sheah Auguers/SD Ellenbecker
Copyright © 2020 - Farms.com. All Rights Reserved.