The August Rural Mainstreet Index, a monthly survey of bank CEOs in rural areas of a 10-state region dependent on agriculture and/or energy, which includes Colorado and nine other north central states in the U.S., found that the rural economy is below growth neutral for the fifth straight month, which indicates that the economy in small rural communities is slowing down. The RMI is conducted by the of Crighton University’s Heider College of Business. An RMI of 50 or more indicates that the economy is in average or better condition. Only Colorado at 56.8 and Missouri at 58.3 had RMI scores above 50. Colorado’s strong showing is a result of increases in the farm and ranch land price index and strong farm and non-farm employment numbers, with 6% growth in farm labor employment and a 4% increase in non-farm employment. Concerns that the RMI is indicating a downturn in the rural economy is caused by supply chain disruptions from transportation bottlenecks, labor shortages and because farmers and bankers are bracing for escalating interest rates and falling farm commodity prices. For example, the August farm equipment-sales index sank to 45.9 from 56.5 in July, its lowest level since November of 2020, and after 20 straight months of advancing above growth neutral. The August loan volume index climbed to 73.9 from 72 in July driven by higher costs of farm inputs and softer agriculture commodity prices, but the good news is that bankers expect see a 1.7% decline in farm loan delinquencies over the next 12 months.
In the late 1990’s, soybeans and corn seeds resistant to Roundup herbicide were made available to farmers, allowing them to control weeds by spraying them with Roundup herbicide. This worked like a charm for a decade or more, until many weed species became resistant to glyphosate, the active ingredient in Roundup. By 2017, soybean and cotton seeds that were resistant to dicamba and 2-4-d were made available by several companies. But immediately, farmers and homeowners began to report that these herbicides were drifting off the site of application by volatilizing. Recently, the EPA released a pair of draft risk assessments stating that the agency had received nearly 3,500 incident reports in 2021 concerning damage to plants that didn’t tolerate the chemical. Over the past five years, reports concerning damage to non-target plants in adjoining fields and non-crop areas including residences, parks and wildlife refuges that were damaged by the herbicides have increased in numbers. The EPA wrote, "Incidents reported for the 2021 season provide a snapshot of potential damage caused by product use, but the number of reported incidents is generally expected to underrepresent the actual number of incidents." Is this is an instance of the law of unintended consequences in action?
Reports of farmland being sold for residential and commercial development are common, but near Wuh·hee·wuh, Oahu, Hawaii, a residential developer is selling over 200 acres of lots ranging from two to five acres for farm land. Peter Savio, President of the Savio Group, states that he wants the land to be used only for agricultural purposes, and that if people buy the land with the intent to resell it, he will take action against them. At over $100,000 per acre, this makes the price of prime farm land in the Corn Belt seem cheap.
George Washington wrote, “Agriculture is the most healthful, most useful and most noble employment of man.”
