Rural Economy Index Climbs But Bankers Ask For More Collateral

The Rural Mainstreet Index, a survey of community bank CEOs, shows economic growth increasing. The 10-state survey by Creighton University focuses on rural areas dependent on agriculture and or/energy.

 The overall index rose to 54.2, where 50 equals growth neutral. This reflects growth over the November 49.9 reading.

“Our surveys over the last several months indicate the Rural Mainstreet economy is expanding outside of agriculture. However, the negative impacts of tariffs and low agriculture commodity prices continue to weaken the farm sector,” said Ernie Goss, PhD, Jack A. MacAllister Chair in Regional Economics at Creighton University’s Heider College of Business.  

Banker confidence fell to 44.3, down from November’s 47.0, indicating pessimism among bankers. Hiring and employment is a healthy spot in the survey, at 57.1, though down slightly from November’s 66.7.

Here are a few highlights from December’s survey:

 “Farmers continue to feel the negative impact of tariffs and that impacts their ability to make a buck,” said Jeffrey Gerhart, CEO of the bank of Newman Grove in Nebraska in the report. “Farmers do not need this kind of disruption in their markets. This is bad policy from the White House.”

Borrowing by farmers advanced in December, moving the loan-value index up drastically to 72.2, up from 60.6 in November.  More than half of bankers are increasing collateral requirements for farm loans due to down income. However, one-quarter of bank CEOs say they’ve made no change in farm lending practices.

The land price index dropped to 35.7, just below November’s numbers. This marks the 60th straight month the index has fallen below growth neutral.

 

Latest News

Where Did All the Corn Acres and Principal Crop Acres Go? The Two Biggest Questions from USDA's Big Prospective Plantings Report
Where Did All the Corn Acres and Principal Crop Acres Go? The Two Biggest Questions from USDA's Big Prospective Plantings Report

USDA says farmers intend to plant 90 million acres of corn this year, which is lower than the trade expected prior to USDA's big Prospective Plantings report.

Vestaron and Simplot Announce Distribution Agreement
Vestaron and Simplot Announce Distribution Agreement

The distribution agreement focuses on Vestaron’s Spear Lep insecticide, which is a peptide-based control method meant to provide growers with a more environmentally friendly alternative to traditional chemicals.

The Scoop Podcast: How To Gear Up For Carbon And Sustainability Programs
The Scoop Podcast: How To Gear Up For Carbon And Sustainability Programs

Tim Hushon, sustainability and technology director at The Mill, details how sustainability factors into their ag retail business and how to partner with farmers on the technology adoption required.

Two Crop Protection Partners Divest Postharvest Solutions Company
Two Crop Protection Partners Divest Postharvest Solutions Company

Sumitomo Chemical and Valent BioSciences have announced Pace International will become part of AgroFresh Solutions.

The Untold Farmer Stories Of Ukraine: Q&A With Howard Buffett
The Untold Farmer Stories Of Ukraine: Q&A With Howard Buffett

Farmer and philanthropist Howard Buffett held a fireside chat during the 2024 Top Producer Summit to share his experiences visiting the front line of Ukraine over the past two years.

Get the Facts Straight on Highly Pathogenic Avian Influenza
Get the Facts Straight on Highly Pathogenic Avian Influenza

Now that the mystery illness impacting some dairy herds has been revealed as the same strain of Highly Pathogenic Avian Influenza that has been impacting the U.S. poultry flock, pork producers are asking questions.