More than three-fourths of rural bankers within 10 states are reporting an economic downturn in their areas. This is despite government payments aiding producers.
The latest Rural Mainstreet Index, compiled by Creighton University, has a reading of 37.9. That's an increase from the May number of 12.5 but it’s still well below growth neutral.
Ernie Goss, Jack A. MacAllister Chair in Regional Economics at Creighton University’s Heider College of Business talked with Farm Journal editor and AgDay host about the results.
“To sum it up, the negatives are getting less negative,” says Goss. “Certainly, the $16 billion federal support program didn’t hurt,” says Goss. “I think that will improve things a bit more in the weeks and months ahead.”
Ernie Goss says despite the $16 billion in USDA farm support payments, only 3% of bankers are reporting positive economic growth.
The survey results also show one-third of bankers with local ethanol plants reported current production shutdowns, either permanent or temporary.
According to the report, approximately, 33.5% of bankers expect low commodity prices to be the greatest economic challenge over the next 12 months for their bank.
“It’s hard to get optimistic when you see commodity prices where they are and that’s [for both] grain and livestock,” says Goss.
More than one-fourth of bankers say rising loan defaults represented the biggest challenge for their banks for the next 12 months.
The next Rural Mainstreet index will be released next month with an update.