What is in this article?:
- Drought Pushes Borrowing Higher, Land Prices Lower
- State-by-state outlook
Drought conditions continue to weigh on the rural mainstreet economy.
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. The RMI survey represents an early snapshot of the economy of rural, agriculturally and energy-dependent portions of the nation.
Colorado: After 19 straight months with an RMI above growth neutral, Colorado plummeted to 25.2 from July’s weak 50.1 and June’s 57.6. The FPI and ranchland price index (RPI) declined to 44.2 from 61.3 in July. Colorado’s new hiring index (NHI) for August was 43.0, well down from July’s 51.8. Mike Bass, president of the First National Bank of Hugo said, “The drought has not affected tourism/recreational spending in Colorado, but the fires across the state have had a major impact on tourism.”
Illinois: For a third straight month, Illinois’ RMI remained below growth neutral. The August index slumped to 34.4 from July’s 36.1. Farmland prices were below growth neutral with a reading of 45.3 for August, down from July’s 50.4. The state’s NHI dipped to 43.7 from July’s 44.6.
Iowa: August RMI rose to 49.2 from July’s 48.6. FPI declined to 57.2 from July’s 63.5. Iowa’s NHI for August dipped to 51.6 from 53.3 in July.
Kansas: RMI for August advanced to 50.1 from July’s 43.2. FPI sank to 53.2 from 58.4 in August, while the NHI decreased to 48.9 from 49.9 in July.
Minnesota: August RMI declined to 52.9 from July’s 54.6. FPI dipped to 60.3 from 66.2 in July, while NHI decreased to 53.7 from July’s 55.1.Minnesota has been spared much of the negative drought impacts. Pete Haddeland, CEO of First National Bank in Mahnomen, says, “Our crops here still look good. We have had the right amount of rain at the right time. The hot summer has had a positive impact on our resorts.”
Missouri: RMI declined to 39.8 from 44.3 in July, with FPI slipping in August to 44.6 from 50.2 in July, and NHI dropping to 31.6 from 35.8 in July.
Nebraska: For a second straight month, growth in Nebraska’s rural economy moved into negative territory. August RMI rose to 44.1 from July’s 43.4, and FPI slipped to 48.9 from July’s 52.3. NHI advanced to a weak 46.0 from July’s 45.8.
North Dakota: The North Dakota RMI declined but remained strong with a regional high of 72.1, down from July’s 75.6. FPI slipped to 68.9 from 73.6 in July, while NHI rose to 67.8 from 66.4 in August.
South Dakota: RMI expanded to 52.2 in August from July’s 46.7. FPI dipped to 49.3 from 50.4 in July, and NHI increased to a still weak 46.3 from July’s 44.6.
Wyoming: RMI slumped to 36.7 from July’s 39.3, while August FPI and RPI declined to 49.5 from July’s 52.3. NHI remained below growth neutral but advanced to 46.4 from July’s 45.8.