Low grain prices, farm income stymie CEO sentiments

Rural bank CEO sentiments fell significantly this month amid lackluster grain prices and farm income losses, according to Creighton University's monthly survey of bank CEOs in rural areas of a 10-state region..The Rural Mainstreet Index fell to 39.6 this month from 50.2 in November. It has been below the growth-neutral score of 50 for all but one month this year. Farmland prices fell for the seventh time in eight months, while farm equipment sales fell for the 17th straight month. .December's confidence index fell to 37.5 from 46.4 in November. "Weak agriculture commodity prices and negative farm cash flow, combined with downturns in farm equipment sales over the past several months, continued to push banker confidence below growth neutral," said Ernie Goss, chair in regional economics at Creighton University's Heider College of Business. Approximately one in four bankers said their local economy was either in a recession or would enter one next year, according to the report. The remaining CEOs expected little growth but no recession. .The region's index for farmland prices dropped to 41.3 from 44.4 in November. The farm equipment sales index fell to 14.3, its lowest mark since the fall of 2016 and down from 14.6 in November. High borrowing costs, lackluster commodity prices and tighter credit conditions are stifling farm equipment sales, Goss said. ."Elevated interest rates and higher input costs, along with below breakeven grain prices for some farmers in the region, have significantly reduced farmer demand for ag land," Goss said. .Farm loan delinquency rates increased 1.2 percent over the past six months, according to the International Trade Association. Regional exports of agriculture goods and livestock increased 2.8 percent this year to $9.98 billion from $9.71 billion during the same period last year..December's loan volume index increased to 69.6 from 58.9 in November. The checking-deposit index dropped to 47.8 from 59.3 the previous month. The index for certificates of deposits and other savings instruments fell to 50.1 in December from 53.7. Federal Reserve interest rate policies have pushed certificate of deposit purchases above growth-neutral for more than two straight years, according to the report. .Other December findings included:.The new hiring index fell to 45.7 from 50.0 the previous month. The home sales index increased to 43.5 from 42.6 in November. Regional retail sales reflected national growth, increasing to 52.1 from 42.0.