Creighton University’s Rural Mainstreet Index fell from May’s solid reading of 57.7 to 49.8 in June, the lowest level since September of 2020. The index ranges from 0 and 100 with 50 reading growth neutral.
The report shows that bankers were asked about the possibility of a recession in the next 12 months. Almost 93% of those surveyed rate the likelihood of a U.S. recession is above 50%.
The average bank CEO expects net farm income for grain farmers to be more than 12% above 2021 levels. The farmland price index also moved higher marking 21 straight months that the index has moved above growth neutral. However, rising costs of farm inputs pushed borrowing up to its highest reading since May of 2019.
“Much like the nation, the growth in the Rural Mainstreet economy is slowing. Supply chain disruptions from transportation bottlenecks and labor shortages continue to constrain growth. Farmers and bankers are bracing for escalating interest rates — both long-term and short-term,” said Ernie Goss, at Creighton University’s Heider College of Business.
Jon Schmaderer, CEO of Tri-County Bank in Stuart, Neb., reported that “fuel prices are starting to have a severe negative impact on rural Nebraska.”
Growing energy costs and higher farm input prices lowered the business confidence index to just under 34%, its lowest level since May of 2020. The home sales index dropped to 55.4 in June from May’s 61.6. The retail sales index for June also fell to below growth-neutral.