Rural bankers remain pessimistic about their local economy, primarily due to the strong U.S. dollar that continues to hamper domestic crops sales on the global market. Respondents in this month’s survey suggested farmland prices were declining more quickly than in past months, although when asked about local cash rent values, bankers reported a 6% increase from rents reported in January.
The Rural Mainstreet Index (RMI), an index which ranges from 0 to 100 with 50.0 representing growth neutral, increased in the April report to 46.0, from 43.6 in March. Ernie Goss, Ph.D, Economics Professor at Creighton University stated, “The stronger U.S. dollar continues to be a drag on the Rural Mainstreet economy.” 34% of bankers described the impact of the strong U.S. dollar as “Negative,” with the remainder describing the impact as “Little or small,”
Source: Rural Mainstreet Index Creighton University
The farmland price index decreased to 33.4 from 39.4 in March. “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.
As planting season begins, farmland sales and auctions have slowed, but realtors in Illinois, Iowa, and southern Minnesota have suggested that over the past six weeks farmland available for sale and farmland auction attendance has been well above average. Historically the majority of farmland transactions occur immediately following the fall harvest. The delayed harvest in fall 2014 caused a slight shift in the majority of farmland transaction to later in the winter months.
Source: Rural Mainstreet Index Creighton University
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