The Creighton University Rural Mainstreet Index for January was still above growth neutral but did fall overall to 51.5 from December’s 54.2, in ten state region.
In Nebraska, the RMI for January sank to 50.9 from December’s 53.7.
“What we’re seeing primarily is commodity prices aren’t moving at a good level, or at least not to a break even for a lot of farmers,” said Ernie Goss, an economist at Creighton University.
The commodity issues remain a problem for soybean, pork and even corn, created by the trade dispute with China.
Each month, community bank presidents and CEOs are surveyed on economic conditions in their communities and their projected economic outlook.
“Around 43 percent say rising loan defaults, are a concern, which was a surprise,” said Goss.
Which was a little bit up from last year, he said.
Another factor of concern by 12 percent is falling farmland values. Currently, in Nebraska, the farmland-price index rose to 47.8 from last month’s 35.7. In Wyoming, it went to 38.8 from 36.6.
Nebraska is also making inroads on trade with other nations. A recent Memorandum of Understanding between Nebraska and Indonesia was signed on Jan. 18, at the University of Nebraska at Omaha. The memorandum will lead to a multi-million dollar purchases of agricultural commodities from the state of Nebraska.
Past exports with Indonesia mainly consisted of agriculture or food-related products such as beef, soybeans and animal feed.
Goss said it’s good news, as agriculture depends heavily on trade and the value of the dollar.
“We’re probably going to see the Federal Reserve halt on interest rates,” he said. “Which is good for agriculture, but our trade disputes with China are affecting other areas of costs, like imports of steel.
Another factor beginning to weigh on the economy, is the partial government shutdown, now the longest in U.S. history.
While the RMI survey didn’t ask the bankers about the effect the shutdown would have on their economies.
Goss said the amount of time the government remains in a partial shutdown will affect the ag economy.