Farmland Prices Fall Below Growth Neutral for Second Consecutive Month in Rural Mainstreet Index

For the 10th consecutive month, the Rural Mainstreet Index (RMI) has fallen below the neutral growth threshold. This downturn is accompanied by a notable decline in farmland prices and a continued slump in farm equipment sales, as revealed by the latest survey results from Creighton University.

The RMI, a key measure of economic activity in nonurban, agriculturally and energy-dependent regions across 10 states, has remained under the growth neutral mark of 50.0. The index, which tracks conditions in approximately 200 rural communities, reflects ongoing economic stress or growth in these areas, according to Creighton.

The June 2024 survey revealed that farmland prices have fallen for the second month in a row after being above growth neutral for 53 consecutive months. The peak for farmland prices this year was in January, where it was at 64.0, indicating a significant downturn from earlier in the year.

Farm equipment sales also experienced a decline, dropping below growth neutral for the 12th time in the past 13 months. The last period of growth neutral or higher farm equipment sales was in July 2023. Since then, sales have struggled, with February marking the peak of farm equipment sales for this year at 49.5.

Delinquency rates for farm and business loans have remained relatively stable over the past six months, according to Creighton’s survey. However, there have been some changes in loan policies: 8.7% of bankers reported increasing farm loan rejection rates, while 13.0% and 4.3% adjusted their loan-to-value ratios by restructuring and reducing them, respectively.

Trade data from the International Trade Assn. reveals a 4.1% decline in regional exports of agricultural goods and livestock for 2024 year-to-date compared to the same period in 2023. This drop in exports adds another layer of difficulty for the rural economy, already strained by falling prices and sluggish equipment sales.

Colorado, Illinois, Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota, South Dakota and Wyoming are the 10 states included in the data.