A Robust Rural Economy in 2006?

Rural America will remember 2005 as a year of drought, hurricanes, and surging gas prices. To be sure, some regions of the country faced devastating natural catastrophes. Yet, these catastrophes did not stop the farm sector from posting another banner income year—nor did they stop the nonfarm sectors from enjoying solid gains in employment and income. Overall, the rural economy was quite resilient in 2005. Heading into 2006, the rural economy appears poised for another year of robust activity, especially if private sector forecasts hold true. Energy prices are the risk to the forecast. The higher oil and natural gas prices translate into higher production costs for factories, farms, and households. Yet, higher prices are also underpinning a new wave of investments and market opportunities in rural America’s emerging biobased energy sector. This article reviews the rural economy in 2005 and discusses th