What is in this article?:
- Bankers See Farmland Values Moderate
- State-by-state outlook
The Rural Mainstreet Index, which looks at the overall health of rural communities, declined in June, driven in part by farmland values, which continue to grow but at a slower pace.
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.
Colorado: For the 18th straight month, Colorado’s Rural RMI remained above growth neutral. The June index declined to a still solid 57.6 from 65.2 in May. The farmland and ranchland price index declined to 62.4 from May’s 77.9. Colorado’s hiring index for June was 57.5, down from May’s 65.3. According to Fred Bauer, president of Farmers Bank in Ault, “Drought is still going on in our area, affecting crops (will have lower yields) and what moisture we have had came with hail in some areas.”
Illinois: For the first time in more than two years, Illinois’ RMI moved below growth neutral, slumping to 43.6 from May’s 50.4. Farmland prices remained above growth neutral at 51.5 from May’s 56.0. The state’s new-hiring index (NHI) dipped to 50.2 from 50.6 in May.
Iowa: Iowa’s June RMI decreased to 56.1 from 60.2 in May. The farmland price index (FPI) slipped to 64.6 from May’s 68.7. Iowa’s NHI for June dipped to 58.9 from May’s 59.1.
Kansas: The Kansas RMI for June slumped to 50.7 from May’s strong 62.1. FPI sank to 59.6 from 70.9 in June, while the state’s NHI decreased to 55.6 from May’s 60.5.
Minnesota: The June RMI for Minnesota expanded to 62.1 from 59.8. Minnesota’s FPI dipped to 67.4 from 71.6 in May, and its NHI advanced to 60.9 from May’s 60.5. Bryan Grove, CEO of American State Bank in Grygla, summarized what many bankers reported for the month, “Recent timely rains in our area were very welcome. Small grain crops are developing nicely with great potential.”
Missouri: Missouri’s RMI declined to 48.9 from 51.8 in May. June FPI slipped to 51.2 from 52.5 in May, while NHI slumped to 41.4 from May’s 52.3. Don Reynolds, president of Regional Missouri Bank in Salisbury, reports that “dry weather and poor crop prospects are starting to take a toll on attitudes.”
Nebraska: Nebraska’s June RMI rose slightly to 50.9 from 50.1 in May, with FPI slipping to 53.4 from 54.2 in May, and NHI advancing to a tepid 51.4 from May’s 49.4
North Dakota: RMI for June declined to a robust and regional high of 88.9 from 91.5 in May. Meanwhile, FPI expanded to 90.2 from 88.5 in May, and NHI declined to 79.4 from 92.2 in May. North Dakota’s expansion continues and is the healthiest in the region and nation.
South Dakota: South Dakota’s RMI slipped to 49.5 from May’s growth-neutral 50.0. FPI dipped to 51.5 from 57.2 in May, while NHI dipped to 50.2 from 51.4 in May.
Wyoming: June RMI for Wyoming slumped to 46.8 from 52.3 in May. The June farmland and ranchland price index declined to 53.4 from 58.8 in May, while NHI sank to 51.5 from 52.5 in May. Bob Sutter, vice chair of Hilltop National Bank in Casper, reports that Wyoming’s state revenues are down due to the low natural gas prices, even though the oil exploration continues at a high level. “This is due in part to our strong oil and gas exploration infrastructure that is active both in Wyoming and in the North Dakota shale play,” he says.