One example, he said, is how some rural communities have been actively investing in health-care facilities. “By keeping health care local, residents can stay close to home and spend money in their communities — rather than traveling to metro areas — supporting rural economic vitality.”
Wagner said another bright spot he’s seeing in Compeer’s 144-county footprint is a renewed investment in these rural communities by industries outside of agriculture. “More industries are looking at bringing manufacturing to the U.S., whether driven by tariffs or avoiding a repeat of the supply chain disruptions we saw during COVID,” he added. This, in turn, is helping to shore up rural communities.
THE POST-COVID-19 IMPACT
The supply-chain disruptions experienced during COVID-19 have shifted the manufacturing dynamics, and rural communities are taking advantage. “The supply chain dynamics are such that U.S.-based suppliers are more reliable, they can expand and allow those dollars to be invested in rural communities,” Wagner explained.
The other impact is the flocking to the rural lifestyle experience. “We continue to see movement to rural communities from people seeking a rural lifestyle. They work remotely and make a local economic impact,” he said. “We continue seeing accelerated interest and activity in new home construction in rural areas, even after significant growth in recent years.”
And the impact is more than just bringing jobs into rural communities. “The interest in living a rural lifestyle impacts the economic engine that goes with it,” Wagner said. “And that gives communities the ability to invest in essential community facilities, whether that’s a rural hospital, clinic, assisted-living facility or even day care.”
Erik Peterson, chief financial officer at Marshall County Healthcare Center, was drawn to Britton because of the more rural lifestyle. He relocated there after living in Sioux Falls with his family. “I had only lived in larger cities my whole life, so I really didn’t know what to expect,” Peterson said. “I visited during the interview process, and what struck my wife and I was that this was a town that was really good for families.”
Despite its size, Britton boasts a new community event center built thanks to a large donation by a local manufacturer, a community pool, a robust emergency services department that’s received extensive community financial support and a medical center that ensures most medical needs can be handled locally (the next medical center is nearly an hour’s drive away).
WE’VE BEEN HERE BEFORE
The current economic downturn is nothing new to agriculture. In his book “The Farm Debt Crisis of the 1980s,” published in 1990, renowned agricultural economist Neal E. Harl, wrote: “Without much doubt, the (agricultural) sector will once again experience trauma like that of the 1980s sometime in the 21st century. It is not known when a farm debt crisis or other cataclysm in U.S. agriculture will come about — in 2035, 2040 or 2050. But it is likely to occur when memories — and warnings handed down to succeeding generations — have faded, and the galaxy of economic conditions is positioned to create a sense of overconfidence among farm decision-makers.”
In rural areas, ag suppliers are adjusting to a reduced demand for products and services. “But these businesses have seen this situation before in agriculture, and they have a playbook of how to work in this environment,” Compeer’s Wagner said. “While any downturn is not good for business, they have past experiences to draw from.”
What’s also unique to many rural communities is that businesses that service rural areas aren’t much different than the farms in the area. “These businesses are often multigenerational, so they’ve been through the ups and downs of the agricultural economy,” Clark said. “They may be hurting financially, but that doesn’t mean that they are insolvent.”
WHAT LIES AHEAD
There is a bit of divergence on rural Main Street, with stories of success and survival versus decline or struggle. “Communities that are attracting different businesses are further ahead,” Wagner said. “Agriculture needs rural communities more than rural communities need agriculture. Typically, a rural community can survive an ag economy downturn over time, but they have to be prepared.”
Consolidation in certain businesses like cooperatives and equipment dealers can benefit some communities while hurting others. “Consolidation decisions are driven by both geography and the ability to recruit and retain a long-term workforce,” he continued. “That’s where we see a lot of differentiation.”
Investment, and a willingness to work together, will be imperative. “Local development authorities need to understand the best fit for their community, because you can attract a manufacturing facility, but they may not be the right one, so they won’t stay long term,” Wagner said. “If these communities work together to attract one manufacturing facility, collectively, they have enough housing, access to health care and infrastructure to support a broader region. We are funding grants to help communities think differently about how to work together to create that economic vitality.”
COMMUNITIES WORK TOGETHER
A common theme among many rural communities is resilience. Communities that have faced adversity before will face adversity in the future and have come together to ensure their survival.
“Relationships matter, and that’s a hallmark of rural communities,” Texas A&M’s Thomas said. “Rural communities come together and rally to support each other, and not just the result of changes in the agricultural economy. We see this all the time, like when we see natural disasters. There are many instances where when a tornado comes through a rural community, people come together to rebuild.”
She explained that these strong relationships and pride in their community have resulted in rural communities being as strong as they are. “That togetherness is something that you might not find in a more urban setting,” she said.
Because of the location of many rural communities, their distance has meant that they’ve had to be more self-sufficient longer than their urban counterparts. “This inherently means that rural businesses have had to manage their business and resources far differently than someone in an urban area,” Clark said.
Peterson, who currently serves on the Britton City Council, said, “You hear so much that small towns are slowly dying. But when I came here, I saw a community that was in good shape. Sure, we have our struggles, but we come together as a community.”
Beck, who has lived in Britton for more than 30 years, said the town has an advantage over a lot of small communities because of the manufacturing jobs available, the hospital and the cooperative. “Britton has always been very resilient and always will be,” he said.
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