Mid-American Money

Contact Information

Dr. Ernie P. Goss
Jack A. MacAllister Chair in Regional Economics
Professor of Economics
Eppley building BA 207
Creighton University
Omaha, NE 68178

Work: (402) 280-4757
Fax: (402) 280-2172
Email: ernieg@creighton.edu

Mainstreet Economy

Facebook Twitter Google+ LinkedIn Addthis

April Rural Mainstreet Index Remains Negative:
Farmland Prices Decline Again


April Survey Results at a Glance:

  • The Rural Mainstreet Index remained below growth neutral for April, signaling pullbacks in economic activity.
  • More than one-third of bankers reported that the strong dollar is having negative impacts on their local economy.
  • Farmland prices declined for the 17th straight month.
  • Agriculture equipment sales were very weak, but up slightly from March’s record low.
  • Approximately 75 percent of bank CEOs reported that Farm Credit represented the greatest competitive threat to their operations.


For Immediate Release: Apr. 16, 2015


OMAHA, Neb. – While the Creighton University Rural Mainstreet Index for April rose slightly from March’s weak reading, it remains below growth neutral, according to the monthly survey of bank CEOs in rural areas of a 10-state region dependent on agriculture and/or energy.   

Overall: The Rural Mainstreet Index (RMI), which ranges between 0 and 100, climbed to 46.0 in April from 43.6 in March. 

“The stronger U.S. dollar continues to be a drag on the Rural Mainstreet economy. This month more than one-third, or 34.0 percent of the bank CEOs reported that the strong U.S. dollar was having a negative impact on their local economy.  Gains in the U.S. dollar have made U.S. goods, especially agricultural and energy products, less competitively priced abroad," said Ernie Goss, Jack A. MacAllister Chair in Regional Economics at Creighton University's Heider College of Business.

Farming and ranching: The farmland and ranchland-price index for April sank to 33.4 from March’s very weak 39.4. “Even though crop prices have stabilized, demand for farmland was weak, pulling agricultural land prices down again. This is the 17th straight month the index has moved below growth neutral,” said Goss. 

Even though farmland prices continue to decline, expected cash rents for non-irrigated agricultural land continued to rise. In January of this year, bankers estimated that average 2015 cash rents would be $214.    This month an average of $227 was recorded.    

According to Todd Douglas, CEO of First National Bank in Pierre, S.D., “With GPS-based yield mapping, we are seeing some of the smarter operators starting to figure out which land is making them money and which is not. So far when someone walks away from some poorer ground, there still seems to be a greater fool ready to step up and rent it.” 

The April farm-equipment sales index increased to a frail 15.6 from March’s record low of 15.2.  The index has been below growth neutral for 21 straight months. “With farm income expected to decline for a second straight year, farmers have become very cautious regarding the purchase of agricultural equipment,” said Goss.

Banking: The April loan-volume index soared to 69.0 from March’s 64.9. The checking-deposit index sank to 50.1 from March’s 56.4, while the index for certificates of deposit and other savings instruments fell to 38.0 from March’s 44.7.

According to Pete Haddeland, CEO of the First National Bank in Mahnomen, Minn, “Cash rents are starting to come down. Most of our Farmers are still in good shape, but they are borrowing more this year.”

This month, bank CEOs were asked to identify the greatest competitive threat for 2015. More than three-fourths, or 76.6 percent, of the bankers surveyed named Farm Credit as their chief competitive threat.  Only 10.6 indicated that other commercial banks represented their greatest competitive threat. “Over the last two years, the percentage of bankers identifying credit unions as their major competitor has risen from negligible to 12.8 percent this month,” reported Goss.    

Hiring: Despite weaker crop prices and pullbacks from businesses with close ties to agriculture and energy, Rural Mainstreet businesses continue to add workers to their payrolls. The April hiring index improved to a solid 54.2 from March’s 52.2. “We have yet to measure any significant decline in employment for the energy sector in the region and for businesses linked to agriculture. I expect that to change in the months ahead as lower energy and agricultural prices work their way through the economy,” said Goss.

Confidence: The confidence index, which reflects expectations for the economy six months out, dipped to 47.0 from 47.8 in March. “The negative trend in farmland prices, agricultural equipment sales, and oil prices have negatively affected the outlook of Rural Mainstreet bank CEOs,” reported Goss.

Home and retail sales: The April home-sales index climbed to 58.2 from March’s 55.5. The April retail-sales index increased to a frail 44.0 from 40.4 in March. “Much like in urban areas, retail sales remain very weak even with the reduction in fuel prices,” said Goss.


For More Information Contact:

Ernie Goss, Ph.D. (402) 280-4757

Bill McQuillan, (308) 428-3925

Cindy Workman (402) 280-2969