OMAHA, Neb.—Profitable farmers have helped spur the economy in 10 Midwest and Plains states to 2007 levels, according to a new survey of bank CEOs released Thursday.
“From farm equipment to farmland to trucks, agricultural producers in the area are spending at a brisk pace,” said Creighton University economist Ernie Goss, who oversees the survey of rural bankers.
The overall index for the Rural Mainstreet economic survey reached 59.3 percent in January, up from December’s 55.4 and last January’s 41.0. The index this month hit its highest level since June 2007.
The index ranges between 0 and 100. A score above 50 suggests the economy will expand during the next six months. A score below 50 would suggest the economy will contract.
The farmland price index dipped from December’s 76.9 to 75.4. The farm equipment sales index was 74.6, down from 77.8 the previous month.
Still, the bankers surveyed remain upbeat about the economy, with the confidence index growing from 62.2 last month to 63.4.
“Even though we had a short crop in 2010 due to excessive moisture, our farmers are very optimistic for 2011. Pricing opportunities are plentiful,” said Charles Helscher, president of Farmers State Bank in Keota, Iowa.
The survey suggested that farmers are reducing the loan volumes at rural banks. The January loan volume index hit a record low of 33.9. The index was 52.3 in December.
The jobs index rose for the second straight month to 52.5, from December’s 50.1.
“For this part of the country,” Goss said, “rural areas are clearly outpacing the urban areas in terms of job growth. While employment in urban areas is virtually flat, annualized growth in the rural areas in a healthy 2 percent.”
Home sales in the region remained weak. After December’s decline to 43.9, the index rose slightly to 44.1.
Goss and Bill McQuillan, CEO of CNB Community Bank of Greeley, Neb., created the monthly economic survey in 2005. The survey index focuses on about 200 rural communities with an average population of 1,300.
Bankers from Colorado, Illinois, Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota, South Dakota and Wyoming are surveyed.
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