Community Bankers of Iowa Monthly Banker Update January 2014 | Page 16

Creighton

Main Street
Economic Survey

U N I V E R S I T Y

Ernie Goss

Rural Mainstreet Economy Healthy for December:
Farmland Price Index Lowest in 4 Years

December Survey Results at a Glance:
• Rural Mainstreet Index indicates rural economy expands at
a healthy pace.
• Farmland price index sinks to lowest level in four years.
• Bank CEOs see rising regulatory costs as biggest threat to
community banks for 2014.
• Agriculture equipment sales decline for sixth straight
month.
• Bankers say low agriculture commodity prices are the
biggest risk for the 2014 rural economy.

Bankers expect 2014 cash rents for non-irrigated cropland to
average approximately $252 per acre. “However, 3.2 percent
of bankers forecast 2014 cash rents above $500 per acre.
Additional declines in agriculture commodity prices will present
a real challenge for a significant share of farmers that are cash
renting,” said Goss.
Jeff Bonnett, president of Havana National Bank in Havana, Ill.,
reported, “2014 will be interesting, as input costs have not come
down in relation to commodity prices. Fasten your chin straps
firmly and hold on, it may be an interesting ride.”

For Immediate Release: December 19, 2013
OMAHA, Neb. – Growth for the Rural Mainstreet economy
climbed, according to the December survey of bank CEOs in a
10-state area.

Banking: The loan-volume index climbed to 66.7 from 56.9 in
November. The checking-deposit index fell to 66.0 from 72.0 in
November, while the index for certificates of deposit and other
savings instruments slumped to 37.2 from November’s frail 44.8.

Overall: The Rural Mainstreet Index (RMI), which ranges
between 0 and 100, with 50.0 representing growth neutral, rose
to 56.1 from November’s moderate 54.3.

This month bankers were also asked to name the biggest
threat facing community banks in 2014. More than half, or 55.9
percent, expect soaring regulatory costs to be the greatest
threat to the community banking industry. Another 23.5 percent
indicated that low loan demand was the chief challenge to
community banks for 2014 while 14.7 percent reported that
rising competition from Farm Credit represented the prime threat
to community banks. No other issue rose above 10 percent.

“The overall index for the Rural Mainstreet Economy continues
to indicate that the areas of the nation highly dependent on
agriculture and energy continue to expand at a healthy pace.
This month we asked bankers to name the biggest threat to the
rural economy for 2014. Approximately 80.6 percent named
lower agriculture prices to be the greatest economic threat in the
next year while 10.6 percent said the Affordable Care Act was
the biggest economic challenge for 2014,” said Ernie Goss, the
Jack A. MacAllister Chair in Regional Economics at Creighton
University.
Farming: The farmland-price index plunged to 47.0, its lowest
level since December 2009, and was down from November’s
54.3. “This is the first time in four years that the farmlandprice index has moved be