NICK GOSNELL
Hutch Post
HUTCHINSON, Kan. — After advancing above growth neutral for the first time since July 2023 last month, the overall Rural Mainstreet Index (RMI) sank below the 50.0 reading in December according to the monthly survey of bank CEOs in rural areas of a 10-state region dependent on agriculture and/or energy.
"We're seeing some real issues out there right now," said Creighton University economist Ernie Goss. "For example, they cut back on agricultural equipment purchases this now declined for the 17th straight month. They're making do with what they can, they cut back on some of their inputs whether that's fertilizer or changing cheaper fertilizer and so on cheaper inputs. That's how they're dealing with it right now."
Rural bankers remain pessimistic about economic growth for their area over the next six months.
"It's been weak for many months," Goss said. "It's just the price of commodities, agricultural commodities, you get one one month they're up, one month they're down, just vacillating in a low range. In other words, it wasn't hasn't been that long when we saw, for example, corn above $7 a bushel now it's of course between four and a quarter and four and a half dollars a bushel."
There's also the uncertainty of trade policy in an incoming Trump administration, and for farmers and bankers, uncertainty can sometimes be worse than bad news.
"The federal government doesn't have the flexibility they had last time when President Trump entered office," Goss said. "Then we had a budget deficit that wasn't as large. We had a debt, a federal debt that wasn't as large. The flexibility for the federal government is diminished significantly."
Also, another year has gone by without a long-term farm bill, which leaves things up in the air as to how farmers should plan for 2025 and forward.