American consumers are spent--and the Midwest is no exception. Even though the agriculture-rich region has been sprouting robust farming incomes lately, Midwestern farmers are just as worried about high energy prices as the rest of the country.
Economic growth in the Midwest faltered this month, according to the Rural Mainstreet Index, which hit its lowest point since its inception in 2005. The Index fell to 42.6 from 47.5 in April, with 50 indicating a neutral rating.
The monthly index was created by City National Bank in Greeley, Neb., and is drawn from a survey of rural bank chief executives in Colorado, Illinois, Iowa, Kansas, Minnesota, Missouri, Montana, Nebraska, North Dakota, South Dakota and Wyoming.
According to the survey, robust farm income has kept agricultural equipment sales high, despite falling below April's reading of 71.4 at its current level of 69.3.
But the profit surge hasn't helped retail sales.
"Farmers are just not spending a lot of their elevated income with local merchants, except for agriculture-equipment dealers," said Creighton University Economist Ernie Goss.
On Thursday, Standard & Poor's upgraded shares of Tractor Supply (nasdaq: TSCO - news - people ), a Brentwood, Tenn.-based farming lifestyle retailer and equipment supplier, to buy from hold on favorable long-term growth prospects.
Farming and ethanol-related stocks had a tumultuous day of trading on Friday on the heels of Senate's passage of the farm bill on Thursday (See: Ethanol For Everyone!). Investors scrambled to dig into the profit-rich industry, leaving the sector's stocks largely mixed at the close of Friday's trading session.
Ethanol producer Aventine Renewable Energy Holdings (nyse: AVR - news - people ) closed ahead by 60 cents or 1.0%, at $59.69 but BioFuel Energy (nasdaq: BIOF - news - people ) shed 20 cents, or 5.6%, closing at $3.35.
Tractor company, Deere (nyse: DE - news - people ), had a rocky day of trading before closing down by 8 cents, or 0.1%, at $83.53. AGCO (nyse: AG - news - people ), which sells a range of agricultural equipment including tractors, combines, sprayers and diesel engines, closed ahead by 60 cents, or 1.0%, at $59.69 a share.
Fertilizer companies, helped by high grain and crop prices, continued their months-long rally as farmers buy up the stinky stuff in bulk, hoping to up crop yields (See: Delayed Reward For Fertilizer Stocks). Bunge (nyse: BG - news - people ), which operates agribusiness and food segments in addition to fertilizer production, gained $7.15, or 6.1%, during Friday trading, closing at $124.48. Potash (nyse: POT - news - people ) added $2.85, or 1.4%, at $207 and nitrogen fertilizer producer, Terra Nitrogen (nyse: TNH - news - people ), closed ahead by $1.49, or 1.0%, at $149.53.
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