OMAHA, Neb. (AP) - A recent report from the Federal Reserve Bank of Kansas City shows lower crop prices in 2014 hurt the wallets of Nebraska residents.
Nebraska was the only state in the country where per capita personal income fell last year, the Omaha World-Herald (http://bit.ly/1IO1nIP ) reported. In the neighboring states of Iowa and South Dakota, per capita income increased less than 1 percent in 2014. The national average increase was 3.9 percent.
The decrease in Nebraskans’ pocketbooks is “primarily due to what’s happening on the farm earnings side,” said Nathan Kauffman, an Omaha branch executive for the Kansas City federal reserve bank. “A big part of what we’re seeing in Nebraska and in Iowa, to some extent, comes from farm earnings.”
Farm earnings in 2014 decreased nearly 35 percent from 2013 levels, hurting earnings growth of other industry sectors in the state’s economy.
Among other highlights of the report include the expected rise in demand for farm loans partly due to lower income from farming. Repayment on farm loans have declined “significantly” and such rates are predicted to worsen in the second quarter.
Late-April corn prices also were about 27 percent lower than at the same time a year ago, according to the report. Kauffman said such price changes impact a largely rural state like Nebraska where agriculture jobs are a dominant source of employment.
Research from the University of Nebraska-Lincoln’s Bureau of Business Research showed that agriculture jobs in 2010 accounted for at least one-third of employment in six of the state’s eight geographic regions. Agriculture accounted for about one in eight jobs in the state’s east region, which is home to roughly half of all Nebraska residents.
Neither Kaufmann nor Creighton University economist Ernie Goss anticipate higher farm income in 2015. The latest estimates from the U.S. Department of Agriculture forecasts net farm income to decrease nearly 32 percent from last year’s forecast of $108 billion.