Strong dollar hurting rural economy

The strong U.S. dollar continues to be a drag on the Rural Mainstreet economy, according to a new survey of bankers in rural communities of Iowa and nine other states dependent on agriculture or energy exports.

'The strong dollar has made United States goods, especially agriculture and energy products, less competitively priced abroad. This has dampened farm income and the Rural Mainstreet economy,” said Ernie Goss of Creighton University's Heider College of Business in a news release.

The Creighton University Rural Mainstreet Index, which ranges between zero and 100, rose slightly to 49 in May from April's weak reading of 46.

The farmland and ranchland-price index for May climbed to 39.7 from April's 33.4.

'This is the 18th straight month the index has moved below growth neutral. There is great deal of variation across the region with many areas continuing to experience strong demand for farmland with little deterioration in farmland prices,” Goss said.

The Federal Reserve Bank of Chicago last week reported farmland values in the first quarter of 2015 were largely the same as a year ago. Values for 'good” agricultural land in the first quarter of 2015 were 1 percent higher than in the fourth quarter of 2014.

Goss said the May farm equipment-sales index fell to a record low of 12.5 from 15.6 in April.

'With farm income expected to decline for a second straight year, farmers remain very cautious regarding the purchase of agricultural equipment,” Goss said.

Despite weaker corn, soybean and wheat prices and pullbacks from businesses with close ties to agriculture and energy, Rural Mainstreet businesses continue to add workers to their payrolls. The May hiring index rocketed to 61.5 from April's much lower, but solid 54.2.

'While the rate of new hiring is healthier in urban areas of each state, Rural Mainstreet communities are growing jobs at a solid, but slower pace,” Goss said.