Rural America Continues To Face Challenges

Economic conditions across rural America remained under pressure in May as weak commodity prices and high input costs continued to strain farm finances.  The latest Rural Mainstreet Index from Creighton University fell to 45.7, marking the fourth consecutive month below growth-neutral levels.

Any reading below 50 signals economic contraction.

"Weakness in farm commodity prices and elevated agriculture input costs are spilling over into the rural business community," said Ernie Goss of Creighton.

Nearly 48% of rural bankers reported farmers' financial conditions worsened compared to a year ago.  Farm equipment sales remained particularly weak, with that index falling to 18.2, the 33rd straight month below growth neutral.  Bankers also cited concerns about higher fuel and production costs squeezing operating margins.

Despite the challenges, first-quarter agricultural exports from the 10-state survey region increased 7.5% from a year earlier, while exports to China jumped nearly 77%.

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