The monthly Rural Mainstreet Index survey, conducted among bankers in 10 states including Iowa, found a strong jump in economic confidence in February. The category, which reflects expectations for the economy six months out, rose to 60.3 from January’s 56.1.

However, Creighton University economist Ernie Goss said: “I expect to see a bit slower growth in farm income as a result of somewhat softer agriculture commodity prices and higher input prices. This will dampen growth for the Rural Mainstreet Economy for 2012.  Growth will continue to be healthy, but it will not match the 2010-11 expansion.”

Very strong cash balances among farmers continue to weaken loan demand at rural banks.  The loan volume index for February slumped to 31.2 from January’s 45.5 and December’s 50.8.

Bankers were asked for their forecast for farmland prices in 2012.  More than one in five, or 21 percent, expect farmland prices to expand by more than 6 percent; 46 percent forecast farmland price growth between 1 percent and 5 percent; 25 percent anticipate no change in farmland prices for 2012; and 8 percent expect farmland prices to decline.

Overall, the Rural Mainstreet Index, which can range between 0 and 100, dipped a bit from January’s very strong level, declining to 59.6 from January’s 59.8.      

The survey focuses on approximately 200 rural communities with an average population of 1,300.