Higher Farm Income Boosts Rural Main Streets

Contrary to the past several years, rural America has a bit more cash to spend this year thanks to 2004's high commodity and livestock prices. Hundreds of struggling rural downtowns may see their best Christmas in years due to the increase in farm prices.

The newfound wealth is revitalizing Main Street merchants. From jewelry to flower arrangements, rural stores are seeing an influx of buying. In recent years small towns have seen shoppers drawn to big local malls.

But overall producers want to spend their money locally if possible. Ken Stone, a retired Iowa State professor and expert in small-town retailing, predicts that if strong farm prices continue, small towns can see the business boom extend past the holiday season. Farmers usually prefer to shop in their hometown area, but it's not always feasible when one's pinching pennies.

Wall Street Journal reports that Buckle, Inc., a teenage clothing store that got its starts in rural America, saw sales rise 5.1% during the third quarter.

Even with more income to go around, many producers will choose not to splurge on Christmas gifts. Instead profits will be used to pay off debts from a string of tight years. Others will reinvest that money back into the farm, purchasing new combines, tractors and pickup trucks.