Farmer income is expected to reach a record high in 2013 and bankers indicated in March that cash rents will increase by over nine percent in 2013, according to the Rural Mainstreet Survey. Farmland values continue to appreciate although respondents are concerned about recent strong growth.
The RMI decreased slightly to 56.9 from 58.2 in January. "Very healthy farm income continues to boost the Rural Mainstreet economy though growth has slowed a bit," commented Creighton University economist Ernie Goss.
The farmland price index increased to 67.2 from 67.0 in February. This marks the 38th consecutive month the index has been above growth neutral. The farm equipment sales index fell to 60.5 vs. 65.8 last month.
According to Goss, "Current readings are consistent with farmland price growth between 12 and 16 percent. The Federal Reserve's cheap money policies continue to bolster farm commodity prices, farm income, farmland prices and farm equipment sales. The Fed has indicated little change in this pro-agriculture money policy for 2013, which means we will likely continue to see healthy growth in farmland prices and farm equipment sales."
Bankers were asked questions regarding inputs for 2013 and on average, they estimate a 6.5% increase in inputs over the next year. Bankers were also asked how much cash rents will increase in 2013; a 9.3% increase is expected.
The loan volume index increased to above growth neutral, 51.5, from 46.7 in February. The checking deposit index increased to 70.5 from 67.2 last month and the certificate of deposit and savings instruments decreased to 42.4 from 47.6 in February.
March's hiring index increased to 59.4 compared to 54.9 last month. The economic confidence index, which reflects expectations of the economy in the next six months, rose to 52.3 from 51.7 in February.
This survey represents an early snapshot of the economy of rural, agriculturally and energy-dependent portions of the nation. The RMI is a unique index covering 10 regional states, focusing on approximately 200 rural communities with an average population of 1,300. It gives the most current real-time analysis of the rural economy.
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