Although growth for the rural economy remains healthy, it slowed a bit in July, according to the Rural Mainstreet Index, a monthly survey of bank CEOs of 10 Midwestern states.
The index slipped to 57.3 from June's 60.5, but was well ahead of last July's 47.3, according to a release from Ernie Goss, an economics professor at Creighton University who conducts the survey. The index ranges from 0 to 100; readings above 50 represent growth.
"Last year at this time, the drought was having a significant negative impact on the Rural Mainstreet economy," Goss said. "This year, ample moisture has boosted the rural economy and the bankers' economic outlook."
The July index for Iowa improved slightly to 62.3 from June's 62.2. The farmland-price index advanced to 54.6 from 49.6 in June. Iowa's new-hiring index for July improved to 58.0 from June's 55.3. Steven Lane, CEO of Security Savings Bank in Farnhamville, noted: "Most of the crops in our area were planted late. It's now up to Mother Nature to see if it amounts to much."
On average, bankers in the 10 states surveyed expect farm income to be down by 3 percent from 2012. Approximately 59.6 percent of bank CEOs expect farm income to be down from 2012, while only 19.5 percent anticipate an increase in farm income and the remaining 20.9 percent expected no change.
A component of the Rural Mainstreet Index, the confidence index, which reflects expectations for the economy six months out, fell to 56.6 from 60.0 in June. "While healthy crop conditions have fortified the economic outlook, recent weaker-than-expected agriculture commodity prices have lowered that outlook," Goss said.
Nearly 78 percent of bankers surveyed said they believe congressional passage of a new farm bill is important or crucial to the Rural Mainstreet economy, Goss said.