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Rural Mainstreet Index Starts Year Off Strong
USAgNet - 01/25/2022

The Creighton University Rural Mainstreet Index (RMI) declined in January, though it remained above growth neutral the for14th straight month, according to the monthly survey of bank CEOs in rural areas of a 10-state region dependent on agriculture and/or energy.

Overall: The region's overall reading for January fell to 61.1 from December's 66.7. The index ranges between 0 and 100 with a reading of 50.0 representing growth neutral.

"Solid grain prices, the Federal Reserve's record-low short-term interest rates, and growing agricultural exports have underpinned the Rural Mainstreet Economy," said Ernie Goss, PhD, Jack A. MacAllister Chair in Regional Economics at Creighton University's Heider College of Business.

This month, bankers were asked to identify the greatest 2022 risk for farmers in their area. Bankers overwhelmingly named rising farm input prices, such as fertilizer, as the top farm threat.

Bankers ranked disruptions of the delivery of farm inputs and rising interest rates as the second and third greatest 2022 threats to farm operations.

"Inflation is a serious problem here. Gasoline prices have nearly doubled since November 2020," said Jim Eckert, president of the Anchor State Bank in Anchor, Illinois. "Food prices are up well above what's claimed by the government. Poor fiscal policy in D.C. is sinking all ships!"

Jim Brown, CEO of Hardin County Savings Bank in Eldora, Iowa, reported that, "Increased input costs have raised our average farmer break even points, but current commodity prices still produce moderate gains in all areas of financial statements."

Farming and ranching: The region's farmland price index decreased to a very strong 88.5 from December's record high of 90.0. January's reading represented the 16th straight month the index has moved above growth neutral.

The January farm equipment-sales index slipped to a very healthy 72.4 from 74.1 in December. This is the 14th straight month that the index has advanced above growth neutral. Readings over the past several months are the strongest string of monthly readings recorded since Spring 2011.


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