While today is traditionally one of the busiest shopping days of the year, a survey finds the rural economy is looking up, while it’s softening in urban areas. The report called the Rural Mainstreet Index is compiled from a survey of bankers from communities averaging 1,300 people in a ten-state region, including Iowa.
Creighton University economics professor Ernie Goss says the outlook is improving for the first time since August and reflects higher grain prices being paid to farmers. Goss says: "So that’s very good for the farm income and of course farmers are now spending some of that income – a lot of it, perhaps – in the local equipment dealers, for example. A lot of our equipment sales are up fairly significantly and that of course is good for the rural economy and that will spill over into the urban areas, but that’s well ahead."
The report contrasts with another recent survey of purchasing managers Goss did that showed a dramatic slowing in regional economic growth. Goss says that survey is more weighted toward urban areas, but there is a link. "We will see some bleeding of the economic downturn into rural America, but I think with very good farm income, with a farm bill that’s moving through Congress and will ultimately be signed by the president and will be pretty good, I think the farm economy’s going to hold up better than the urban areas," Goss says.
Efforts to shut off debate and move the farm bill fell short last week and are not expected to be renewed until December. Farm state senators are hoping that bill, or other legislation, will increase requirements for using ethanol, which in turn contributes to high grain prices.