Dr. Ernie Goss looks, listens, and studies many things. What do numbers show? What do they mean? What do people say? How did they say it? The combination of all those things makes him forever focused on the future based on trends that he observes now.
“Going in the wrong direction,” Goss summarized about what is taking place in smaller communities across the Midwest during his conversation with American Farmland Owner from his home in Omaha, Nebraska.
Goss is Jack A. MacAllister Chair in Regional Economics at Creighton University’s Heider College of Business and the director of the Institute of Economy Inquiry.
WATCH: Dr. Ernie Goss explains a disconnect between macroeconomic factors and the experiences that people are having, especially in agriculture and manufacturing. See that conversation with Iowans for Tax Relief here.
Among his most prominent contributions to economic discussion is his work compiling The Rural Mainstreet Index. The index surveys bank presidents and CEOs in rural communities in ten states whose economies are tied to agriculture and energy production.
The responses from the financial executives in these 200 communities (towns with an average population of 1,300) provide real-time analysis of economic conditions. They can capture trends outside the national headlines.
States included in the monthly index: Colorado, Illinois, Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota, South Dakota, and Wyoming.
The local financial leaders’ words and the data they helped Goss collect recently add up to a pessimistic view of the economy in small town (Midwest) U.S.A.
“Farm equipment sales have now declined for the 15th straight month,” Goss said.
Does that surprise him? Not at all. “No surprise to farmers out there with interest rates significantly higher and with farm income down.”
The Rural Mainstreet Index tumbled to its lowest level since the beginning of the pandemic in 2020. And it has continued what is now nearly a year-and-a-half slide.
Among the other negatives:
Negative growth for 14 straight months.
Farmland prices dropped for the fifth time in six months.
61.5% of bankers felt that farmers’ financial position in their area had deteriorated over the past six months.
FLASHBACK: In this interview with “Market to Market,” Dr. Ernie Goss shared what he was seeing in the rural Midwest in November of 2023. See that interview here.
There was one other finding from the October report that will be worth watching.
Question: Which presidential candidate would be most supportive of the rural economy?
Donald Trump: 85.2%
Kamala Harris: 3.7%
Someone else: 11.1%
The Rural Mainstreet Index respondents received their wish on Election Day 2024: Trump will become the next president of the United States. That has Goss thinking ahead to one of the promises (about which we have written frequently at American Farmland Owner) that Trump made.
Trump on the campaign trail numerous times warned that he would escalate tariffs. Goss heard it loud and clear. So did other economists.
“You won't find many economists that agree with that,” Goss said.
Higher tariffs would hit agricultural and manufacturing sectors hard, Goss said. Aspects of agriculture – as The Rural Mainstreet Index found – are already struggling. If higher tariffs raise costs on imports, that could increase costs for American agricultural producers. Other countries could also respond to those higher tariffs by raising tariffs on American products headed to those other countries.
RELATED: An article that appeared in Fast Company showed how Donald Trump’s threats to significantly escalate tariffs could harm American producers worse than his higher tariffs against China during his first administration. China found additional trade opportunities with Brazil and Argentina because of the higher tariffs. Read that article here.
Goss, though, wonders whether Trump will follow through with everything that he has threatened. He hopes that Trump doesn’t.
“I think he's a negotiator in chief,” Goss said. “That's more posturing, I hope.”
That hope, according to this longtime economic expert, is that tariffs won’t be as widespread as feared. “If you’re talking about selective tariffs…and selective nations…and pushing them to reduce their tariffs to accommodate our agriculture, for example, that'd be a good move.”
“I hope that’s what's going to be happening.”
