Weak prices for corn and beans and other agricultural commodities has flattened growth in rural economies, according to a closely watched Midwestern gauge.
The Rural Mainstreet Index slipped to 55.8 this month from 57.3 in July, but still was ahead of last August's 47.1. A reading of 50 indicates neutral growth.
"Last year at this time the drought was weighing on the Rural Mainstreet Economy. This year, weaker agriculture commodity prices are having a dampening impact on the farm economy and businesses tied to agriculture. Even so, the economy continues to expand at a reasonable pace according to bank CEOs," Ernie Goss, the Jack A. MacAllister Chair in Regional Economics at Creighton University, said in a news release.
The index is compiled from a survey of bankers in 10 farm states, including Iowa.
The report showed declines in farmland prices, purchases of farm equipment, loans, hiring, house and retail sales and confidence. However, all of those numbers remained at relatively high readings that show an expanding economy. In every category, index readings were above those from a year ago.
For Iowa, the overall index reading dropped to 56.9 from 62.3 in July. The farmland-price index slipped to 53.2 from July's 54.6. Iowa's new-hiring index for August declined to 52.4 from July's 58.
A report from the Federal Reserve Bank of Chicago showed that Midwest farmland prices increased 17 percent in the second quarter from a year ago, but showed no gain from the first quarter of this year. The last time there was no quarterly increase in agricultural land values was in 2009, according to the report.