A survey Missouri rural bankers finds them feeling bullish about the rural economy.  But there’s a shadow over those good feelings.

Creighton University economist Ernie Goss runs monthly surveys of small-town bankers and of purchasing agents who are in the middle of the supply and demand cycle in ten states.  This month’s survey of Missouri bankers shows they’re feeling the best about the economy that they have felt since 2007, before the recession hit. 

His farmland price index is up 27% from November. And his new-hiring index is up by almost a third.  “Farmers and non-farm investors are driving up the price of agricultural land…It’s being sustained, in this case, by the federal reserve’s easy money policy that is pushing up agricultural prices but also making funds available for borrowing and buying,” he says.

But Goss warns of a farmland bubble because of those low-interest policies and says higher interest rates could let the air out of it. 

He says the small-town bankers feel much better about the economic rebound than the purchasing managers, who are more likely to be in cities.  Goss says his survey of Missouri and nine other states shows there is is a big difference in attitudes between those who depend on agriculture and those who don’t.

AUDIO: goss interview 11:04