BUSINESS JOURNAL

Index rises in rural Midwest banker survey

Staff and wire reports

OMAHA — The overall index for an economic survey of bankers in 10 Midwestern and Plains states has risen for a second consecutive month, suggesting more growth in the months ahead.

The Rural Mainstreet Index hit 53.2 in April, compared with 50.1 in March.

The survey indexes range from 0 to 100, with 50 representing growth neutral. A score above 50 suggests growth in the months ahead.

Ernie Goss

Creighton University economist Ernie Goss oversees the survey, and he said the results indicate that areas highly dependent on agriculture and energy are experiencing slower growth than they were a year ago. But he said recent increases in commodity prices should boost the economy in the months ahead.

This month, bankers were asked to name the biggest challenge for farmers for this year's planting season. Almost one-third, or 31.5 percent, reported that low agriculture-commodity prices were the greatest threat to farming profitability. Almost 28 percent named lack of adequate moisture, and 27.6 percent indicated high input prices were the biggest challenges for crop farm operations. Thirteen percent indicated high cash rents represented the greatest 2014 challenge for crop farmers.

Bankers were asked to estimate the break-even price for corn production in their service area.

"Bank CEOs, on average, indicated that the break-even corn price was approximately $4.30 per bushel. This is down from a break-even price of $4.84 recorded in our February 2013 report," Goss said.

Farm equipment sales remained below growth neutral for the 10th straight month. The April index rose to 36.7 from March's even weaker 29.3.

The confidence index, which reflects expectations for the economy six months out, expanded to 54.0 from last month's 47.3.

"An improving national economy, higher agriculture commodity prices and passage of the farm bill pushed economic confidence among bankers higher for the month," Goss said.

Bankers from South Dakota, Nebraska, Iowa, Minnesota, North Dakota, Wyoming, Colorado, Kansas and Missouri were surveyed.