Rural Bankers: Farm Loans Soar to New Level

For five straight months, the Rural Mainstreet Index(RMI) has shown above neutral growth for the rural economy. The monthly survey of bank CEOs in a 10-state Midwest region is at 50.0 for April 2019, which is at growth neutral and down slightly from 52.9 in March.  “Our surveys over the last several months indicate the Rural Mainstreet economy is expanding outside of agriculture. However, this month, 43.8% of bank CEOs indicated that the recent floods were having a negative impact on their local economy,” says Ernie Goss, who chairs Creighton’s Heider College of Business and leads the RMI. Around 22% of bankers expect an increase in farm loan defaults stemming from recent floods, while 78% expect floods to have little or no impact on farm loan defaults. Overall, crop farmers seem to have been hit the hardest with flooding damage. Of bankers reporting farm flood damage, around 50% indicated grain farmers incurred the greatest economic damage, while 40% reported livestock producers sustained the greatest flood damage. The remaining 10% said the greatest flood damage was received by farm residences.