Bank CEO sentiments highest in 15 months

Bank CEO sentiments in the central states reached their highest mark in 15 months in November, according to Creighton University's Rural Mainstreet Index. .The RMI increased to 50.2 from 35.2 in October. The index ranges between 0 and 100, with any reading above 50 indicating growth. Rural bankers' sentiments about economic growth for the next six months remained negative but improved. November's confidence index increased to 46.4 — its highest reading in more than 2 1/2 years — from 29.6 in October. ."Weak agriculture commodity prices and negative farm cash flow, combined with downturns in farm equipment sales over the past several months, continued to place banker confidence below growth neutral," said Ernie Goss, chair in regional economics at Creighton University's Heider College of Business. .CEOs expect farmland prices to fall nearly 3 percent over the next 12 months, according to the report. Farmland prices fell for the sixth time in the past seven months in November, even as the region's farmland index increased to 44.4 from October's six-year low of 38.5. "Elevated interest rates and higher input costs, along with below break-even grain prices, have significantly reduced farmer demand for ag land," Goss said. .Regional exports of agriculture goods and livestock increased 1.1 percent year-to-date to $8.73 billion from $8.64 billion in 2023, according to the International Trade Association. ."Yields have been healthy across the region and have offset some of the weakness in farm commodity prices," Goss said. "Likewise, lower fuel costs and lower short-term interest rates boosted the modest improvement in farm conditions." .The index for farm equipment sales fell to 14.6 from 18.8, its lowest reading since 2016. The index has been below 50 for 16 straight months amid high borrowing expenses, tighter credit conditions and below-average farm commodity prices. .November's loan volume index fell to 58.9 from 73.1 in October, while the checking deposit index dropped to 59.3 from 63.7. The index for certificates of deposits and other savings instruments fell to 53.7 from 63.5 in October. .Other November report findings included:.Sixty-four percent of bankers recommended the Federal Reserve not change short-term interest rates at its December meeting. The remaining 36 percent support a 25-basis-point cut. The home sales index fell to 42.6 from 46.3 in October. Retail sales in the region were also weak, with the related index increasing to 42.0 from 36.0. The new hiring index remained at 50.0.