DES MOINES, Iowa - Local bankers in small towns across Iowa and nine other states are surveyed to make up the "Rural Mainstreet Index," and the latest index shows a distinct lack of optimism about the rural economy.

The index rose from 34.8 in January to 37 points in February, which is still considered below neutral in terms of their outlook for growth. Creighton University economist Ernie Goss, who oversees the survey, said it appears farmers are more overextended at banks than at this time last year, but it isn't a cause for alarm.

"The farmers still remain in reasonably good condition," he said. "This is nothing like a return to the 1980s, where the farmers mortgaged their land up significantly, and we are moving into a territory where the farmer is getting more leverage than before."

Goss said continued low commodity prices primarily are to blame for the negative outlook. The bankers were asked for their current views of the local economy, and predictions for the coming six months. Only 8.7 percent said their local economy is expanding, while more than a third - almost 37 percent - called theirs a recession.

Goss said he believes market conditions will improve in the second half of 2016, with some cautions.

"2016 is going to be somewhat like 2015, a bit challenging for the rural areas," he said. "For example, farmland prices still coming down; we're seeing cash rents, cash land rents, for the region coming down a bit."

He said the rural economy is stabilizing, but it's been at a low point.

"What we need to see going forward is at least international trade improving, also a turnaround in the global economy - and tack on a weaker dollar, that would all push the agricultural economy into positive territory," he said. "But right now, it's not in the immediate horizon."

This is the sixth month in a row with survey results below growth-neutral levels. Higher home sales in rural communities are one bright spot in the report.

The survey is online at creighton.edu.


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Rural communities across Massachusetts are benefiting from state grants aimed at strengthening the local food supply and building climate resilience.

State officials have awarded nearly $4 million to help farmers improve soil health, upgrade irrigation systems and prepare for extreme weather events, including the current critical drought conditions.

Ashley Randle, commissioner of the Massachusetts Department of Agricultural Resources, said farms are helping the state meet its ambitious climate goals.

"They're a mitigation and resilience strategy so that farms can be best positioned to withstand the changing weather conditions that they are facing," Randle explained.

Randle pointed out grants will help farms improve efficiency and environmental controls and reduce greenhouse gases. Massachusetts has set a goal of reaching net-zero emissions by 2050.

From cranberries to oysters, the majority of farms in Massachusetts are smaller, family-owned operations. Randle noted grants will help farmers purchase high tunnels and other equipment needed to extend their production season. She emphasized it helps secure jobs and provides income to local economies during the winter months.

"All of these grants are really helping to ensure that we have a stable food supply," Randle stressed. "And to continue to grow and adapt should there be climate change impacts like we saw last year that devastated the sector."

Last year, a deep freeze in February spoiled the peach crop while a late frost in May damaged most tree fruits. Significant flooding last summer severely damaged 13,000 acres, resulting in more than $65 million in losses. Randle added farms often face unpredictable factors but grant programs can help them adapt and thrive in the face of uncertainty.


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A Missouri-based farm group is fighting to keep the proposed "FARM Act" from becoming law, warning it would benefit large corporate farms at the expense of smaller ones.

The Farm Action Fund, a nonpartisan advocacy group, contended the proposed legislation in Congress, which is an extension of the five-year Farm Bill, would funnel more money to big corporate farms, giving them an unfair advantage and making it harder for small and mid-sized farms to survive.

Joe Maxwell, president of the Farm Action Fund, believes the legislation is making history but not in a good way.

"As far as I know, and I've been doing this for about 40 years, it's the first time there's been policy that would discriminate among the commodity crop growers in the United States, saying that the largest ones get more money," Maxwell explained. "Oftentimes, they're the ones that need the least money."

The National Farm Coalition reported 20% of farms control nearly 70% of U.S. farmland, which it said shows significant consolidation. If passed, The FARM Act would allocate around $21 billion in aid.

Nearly 90% of Missouri farms are smaller, family-owned operations. According to the U.S. Department of Agriculture, small farms are the backbone of U.S. agriculture. They make up 88% of all farms, controlling nearly half of the nation's farmland. Maxwell pointed out his organization is urging them to take a stand on the FARM Act, because the competition is formidable.

"I think it's the power of the dollar expressing itself in the halls of our United States Capitol," Maxwell contended. "The largest farmers have brought in the lobbyists and the trade organizations, to give them an upper hand."

Rep. Mark Alford, R-Mo., and Rep. Sam Graves, R-Mo., are cosponsors of the FARM Act.


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As President-elect Donald Trump is sworn in next month, the farming community wonders if he'll follow through on tariff threats. One expert says for top soybean states such as North Dakota, farmers aren't in a great position to withstand any fallout.

The latest U.S. Department of Agriculture farm income forecast paints a gloomy picture, with declines in commodity prices dragging things down. And the incoming administration appears poised to enact more tariffs - as it did during Trump's first term.

Ben Palen, who runs the consulting firm Ag Management Partners, said this time around, there's increased political instability on the global front and greater export competition.

"I just don't think that you can have a coherent and consistent policy for agriculture if you go from one crisis to another," he said.

Trump regained strong support from agricultural counties in this election, but Palen said his fellow producers need to be prepared for what happens now that the votes have been counted. In Trump's first term, emergency aid was sent to farmers affected by the initial trade war. But Palen noted there's a strong push for the new administration to pursue budget cuts, so financial relief could be harder to come by.

Even though many farmers still back Trump, Palen said he feels this sector doesn't want to get swept up in trade rhetoric and have to be bailed out.

"I think farmers are very good at production," he said. "It's just part of our DNA; we want to produce, produce, produce."

He argued that it's up to policymakers to find new markets for farmers to sell their crops, as opposed to simply focusing on trade disputes.

Other voices, such as the Texas agriculture commissioner, have welcomed the idea of new tariffs, saying the U.S. needs to hold firm against countries such as China.

In the first trade war, U.S. agricultural export losses exceeded $27 billion.


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