By NICK GOSNELL
Hutch Post
The overall economic conditions in the ten state region covered by Creighton University's Rural Mainstreet Index survey are below growth neutral, but there are still some positives on the horizon, according to Creighton University economist Ernie Goss.
"We're talking about higher interest rates, of course, and certainly agricultural commodity prices remain weak," Goss said. They're a bit stronger than they were, but certainly compared to previous year, this same time last year, prices are down, agricultural commodity prices, likewise, exports of agricultural goods remaining weak, but the reading for the farmland prices is only slightly below growth neutral, so not as bad as some of the other readings, and furthermore, we had some good readings and good responses from bankers in terms of the farm financial conditions."
One tough spot is that farmers are reticent to spend to expand their operations.
"The demand for agricultural equipment is certainly much weaker," Goss said. "Farmers are just looking at the short to intermediate term and it doesn't look that good, so they're pulling back on their farm equipment purchases, and certainly, we look to the equipment dealers and the equipment manufacturers, they're weaker. In other words, John Deere has been laying off, for example, other company agricultural equipment manufacturers, not nearly as strong this year as last year, and our numbers are pretty consistent with what the USDA expected for the year. USDA expects farm income to be down for 2024 below 2023, which was lower than 2022, so all in all, our numbers are stacking up much like what USDA expected."
The margins for farmers are tighter, but they are paying their debt and holding on to their land, so it is marginally better than the farm crisis days of the 1980's, but we'll see what the next few months bring in terms of commodity prices and if there is any substantive policy change that comes out of the Farm Bill negotiations.