OMAHA, Neb. (AP) – The economy of rural areas in 10 Plains and western states remains strong, according to a new monthly survey of bankers in the region released Thursday, but those bankers said they are increasingly concerned about the rising costs associated with operating farms.
The Rural Main Street Overall Economic Index fell in January to 61.1 from December’s 66.7. Any score above 50 suggests a growing economy, while a score below 50 suggests a shrinking economy.
“Strong grain prices, record Federal Reserve short-term interest rates and growing agricultural exports have supported the core rural economy,” said Creighton University economist Ernie Goss, who supervises the investigation.
Bankers surveyed said their top concern for farmers in 2022 was rising inflation driving up the prices of farm supplies, from fuel to fertilizer. Disruptions in the delivery of agricultural supplies ranked second among bankers’ concerns and rising interest rates third.
“Inflation is a serious problem here,” Jim Eckert, president of Anchor State Bank in Anchor, Illinois, said for the report. “Petrol prices have almost doubled since November 2020.”
Jim Brown, CEO of Hardin County Savings Bank in Eldora, Iowa, said rising costs “have increased the average farmer’s break-even point,” but current commodity prices still allow most farmers to show moderate gains.
Despite concerns, bank CEOs are optimistic about the next six months. The survey’s confidence index rose to 61.1 from 55.2 in December.
Bankers from Colorado, Illinois, Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota, South Dakota and Wyoming were interviewed.