High Input Costs Putting Pressure On Farm County, Goss Says
Creighton University’s June Rural Mainstreet Index sank into negative territory for the first time since September 2020. Dr. Ernie Goss is co-creator of the RMI.
“Inflation is a really big concern, of course, with the accompanying interest rate hikes. The Federal Reserve, of course, has increased interest rates three times this year and they'll rise again in July, so that's pushing some numbers negative. The Expectations and Confidence Index dropped significantly for the month. And what we're seeing is housing is being negatively affected. The numbers in our survey are not as good as we've seen in previous months. Likewise, retail sales are falling, not as good there, of course, with a lot of the growth and most of the growth we're seeing in retail sales is mostly from inflation.”
Goss added an overwhelming majority of ag bankers in the survey predicted a recession for the rural economy.
“As a result, we asked bankers in our survey about the probability of recession, and more than nine out of 10 bankers rank the probability of recession at more than 50%, so only seven percent rank the probability of recession at less than 50%. So, most of the bankers see a recession ahead, and that's, of course, a big problem for the small businesses and even some of the big businesses on rural Main Street.”
He added, higher fuel prices are starting to take a toll on the rural economy, adding the farming community are big energy users. But, despite the rising input costs, bankers who responded to the June survey say farm income is still looking strong in 2022.
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