Low numbers overall for the rural American economy in October, but a few glimmers of hope. (Photo By: Getty Images/iStockphoto)
Rural Mainstreet Index climbed from September's 39.6 to 45.3 in October. But the index remains below growth neutral, and on many fronts there's a great deal of pessimism.
"As a result of weak farm income and low agriculture commodity prices, approximately 9.5 percent of bank CEOs expect farm loan foreclosures to pose the greatest threat to banking operations over the next five years," said Ernie Goss, an economics professor at Creighton University's Heider College of Business.
Farmland prices fell for the 47th consecutive month across the 10-state region in which community bank presidents and CEOs are surveyed for the index.
"Where can I find a spot price for corn of $3.50 or above today? Try $3 to $3.20, which is below the break-even by all means," said Fritz Kuhlmeier, CEO of Citizens State Bank in Lena, Illinois.
For the 50th month in a row, the agriculture equipment sales index fell below growth neutral.
The confidence index, which reflects expectations for the economy six months out, increased from 36.1 in September to October's 37.0, which officials pointed out is still a weak number.
"Concerns about trade, especially current NAFTA negotiations, and low agriculture commodity prices impaired bankers' economic outlook for the month," said Goss.
Another uptick came in the employment gauge. It hit 57.3 in October, compared to September's 55.9. Rural Mainstreet businesses not linked to agriculture increased hiring for the month and at a faster pace than in September, the report said.