For the second straight month, the Rural Mainstreet Index advanced as it approached its highest level since January 2008, according to a published report.
Based on this month's survey of chief executive officers at banks in 10 states, the index increased 2.1 points from November to 55.4, according to the Nebraska City News-Press. The rating was 40.9 in December 2009.
"Very healthy farm income is rippling across the Rural Mainstreet economy," according to Ernie Goss, an economist at Creighton University in Omaha, Nebraska and one of two industry professionals who created the index in 2005. "Businesses heavily dependent on the farm economy continue to experience very strong economic conditions."
He said 35 percent of bankers interviewed cited the bursting of the farmland price bubble as the most perilous threat to next year's farming economy. One chief executive officer noted that the very quick growth and expansion of the price of farmland is a topic that ought to monitored.
"A land auction was held two weeks ago and land that would have brought $2,500 an acre two years ago sold for $5,000 to $5,500 an acre," according to Michael Johnson, chief executive officer of Swedish American State Bank in Courtland, Kansas.