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October RMI: Rural economy falls to five-year low
The latest Rural Mainstreet Index shows the ag economy has slumped to a five-year low.
Ag economist Ernie Goss with Creighton University says weak agriculture commodity prices continue to dampen economic activity in the Midwest.
“It’s certainly not good with corn, soybeans, and wheat, which is the three products we tend to focus on in this part of the country. They are not doing well. These prices are below what I would call break-even.”
He tells Brownfield the October index fell to a 34.6 reading, which is its lowest level since May 2020.
“I’m concerned about the short and, to some degree, the intermediate term. Long-term, not so much. We’ll see this get worked out.”
Goss says future interest rate cuts from the Fed could help the situation in the short-term.
“Interest rates remain fairly high. The Federal Reserve meets again on February 28th and 29th. They will reduce interest rates, but that’s on the short end.”
The October survey also revealed that farm equipment sales have dropped below growth neutral for the 26th month in a row.
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