The Kansas Rural Mainstreet Index for June shrank to 34.6 from May’s 35.4 because of decreases in farmland prices, hiring index, and exports on agriculture goods and livestock.
A score of 50 is considered growth neutral, while anything below 50 is considered contraction. The index ranges between 0 and 100, with a reading above 50.0 representing growth. The scores are compiled from surveys of bankers in rural areas of a 10-state region that includes Kansas.
“Higher interest rates, weak agriculture commodity prices, and sinking agriculture equipment sales pushed the overall reading below growth neutral for the 10th straight month,” said Creighton economics professor Ernie Goss of June’s report.
Kansas Individual Indicators
The state’s farmland price index decreased to 47.1 from 49.2 in May. According to trade data from the International Trade Association, exports of agricultural goods and livestock for 2024 year-to-date were down 4.4% from the same period in 2023.
The new hiring index for Kansas fell to 44.3 in June from 45.9 in May.
Regional Numbers
For the 10th straight month, the overall Regional Rural Mainstreet Index registered below growth neutral; the overall reading for June fell to 41.7 from 44.2 in May
Farmland prices dropped just below the neutral for the second straight month at 49.9 in June, after exceeding the threshold for 53 consecutive months.
“Only 4.3% of bank CEOs reported that farmland prices expanded from May levels,” Goss said.
Seven of the 10 states included in the data have seen a fall in the Rural Mainstreet Index [RMI] from April to May, which includes Colorado, Kansas, Minnesota, Nebraska, North Dakota, South Dakota, and Wyoming.
North Dakota saw the largest decrease in RMI this month, as the state began with 41.2 in May and fell to 36.3 in June.
Illinois, Iowa, and Missouri all saw slight increases in RMI. Iowa recorded the largest spike, which increased to 7.4 from 48.0 in June compared to 40.6 in May. Illinois and Missouri both saw a 3.1 increase in June.
Regional Home and Retail Sales
Home and retail sales rose above the growth neutral for the first time in the past seven months. In June, the regional home sales index rose to 62.5 from 46.0 in May. The retail sales index for May fell to 41.3 compared to 46.1 in May.
“High consumer debt, elevated interest rates and weaker farm income are cutting into retail sales for the Rural Mainstreet Economy,” Goss said.
Regional Hiring
The new hiring index decreased to 47.7 in June, the lowest reading the report has seen in hiring since January 2021.
“Only 4.5% of bankers reported an increase in hiring from the previous month. This is down from 7.7% in May and 13.6% in April,” Goss said.
Regional Farming Land & Equipment Sales
Farming and ranching land prices have decreased below 50 for the second straight month to 49.9 in June but did increase compared to last month’s 47.9.
Farming and equipment sales have also dropped in June, 31.8 in June from 34 in May.
“This is the 12th time in the past 13 months that the index has fallen below growth neutral. Higher borrowing costs, tighter credit conditions and weak grain prices are having a negative impact on the purchases of farm equipment,” Goss said.
