The Creighton University Rural Mainstreet Index (RMI) declined in January, though it remained above growth neutral for the 14th straight month, according to the Jan. 20, 2022, release of the monthly survey of bank CEOs in a 10-state rural area.
According to the Omaha-based RMI, the region’s overall reading for January fell to 61.1 from December’s 66.7. The index ranges between 0 and 100 with a reading of 50.0 representing growth neutral.
"Solid grain prices, the Federal Reserve's record-low short-term interest rates, and growing agricultural exports have underpinned the Rural Mainstreet Economy," said Ernie Goss, PhD, Jack A. MacAllister Chair in Regional Economics in the Heider College of Business.
When asked this month to identify the greatest 2022 risk for farmers, bankers overwhelmingly named rising farm input prices, such as fertilizer, as the top farm threat.
Bankers ranked disruption in input deliveries and rising interest rates as the second and third greatest threats to farms.
The January farm equipment sales index slipped to a healthy 72.4 from 74.1 in December. This is the 14th straight month that the index has advanced above growth neutral. Readings over the past several months are the strongest string of monthly readings recorded since Spring 2011.
The January loan volume index plummeted to 28.8 from December's 61.7. While January farm loans are normally low, this reading was below normal January readings. The checking-deposit index climbed to 76.9 from December's 68.3, while the index for certificates of deposit, and other savings instruments increased to a weak 42.3 from 26.7 in December.
On average, bank CEOs expect the Federal Reserve to raise short-term interest rates by 0.70% (70 basis points) in 2022. Approximately 18.5% of bankers expect four or more one-quarter percentage point rate hikes in 2022.
The survey represents an early snapshot of the economy of rural agriculturally and energy-dependent portions of the nation. The RMI is a unique index covering 10 states—Colorado, Illinois. Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota, South Dakota and Wyoming—focusing on approximately 200 rural communities with an average population of 1,300. It gives the most current real-time analysis of the rural economy. Goss and Bill McQuillan, former chairman of the Independent Community Banks of America, created the monthly economic survey in 2005 and launched in January 2006.