Mainstreet Index tracks the ups and downs of the rural economy | Company

Ernie Goss has a finger on the pulse of the economy in the Midwest, but that doesn’t mean the Creighton University economist thinks he knows exactly what’s going to happen.

“One of the defining characteristics of the agricultural economy is that it is volatile. It has its ups and downs,” says Goss. “Predictions are always revised as facts change.”

The facts certainly continue to change this year, as they have for a number of years, Goss says. But he’s still working to try to understand what’s happening in the rural Midwest as part of Creighton University’s Rural Main Street Economic Index.

The index was launched in 2006 and surveys rural bankers in small towns in 10 states. The average community in the survey is only 1,300 people, and although the survey focuses on bankers and looks at the rural economy rather than the agricultural economy directly, it can be difficult to separate the two, said Goss.

There are several issues plaguing the rural economy right now, Goss says.

Commodity prices are still very good, but slightly weaker than at the start of the year. Drought conditions in the western United States and the western part of the corn belt are a real problem for farmers.

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And there are still plenty of issues with retail and commercial businesses trying to find labor and deal with supply chain issues (although those things have improved a bit). For example, there is always a shortage of truck drivers.

All of these had an impact on the rural economy, especially west of the Mississippi.

The war in Ukraine is also a factor, but more in the corn market than in the soybean market.

“Most Americans don’t understand that agriculture is a very global economic sector,” he says. “What happens in Ukraine is telegraphed to the economy of North Dakota, South Dakota and Nebraska.”

There are several other potential problems, but they do not appear to be major issues for the rural economy at this time.

This list includes a higher dollar, which could impact exports, and higher interest rates, which could impact borrowers. But Goss says most farmers entered the year in good financial shape and most bankers started the year in an optimistic mood. These things are still the case, although drought and war have had negative impacts on the economy.

Due to these various trends, the mood regarding the economy in rural areas has deteriorated in recent months, but there is no panic. It’s certainly not a situation like the one that hit farmers in the 1980s, he says.

The August survey fell for a fifth consecutive month, falling below neutral growth for a third consecutive month. The region’s overall reading for August fell to 44.0 from July’s 46.0. The index ranges between 0 and 100 with a reading of 50.0 representing neutral growth.

About Keneth T. Graves

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