One in Three Banks Tightened Farm Credit Standards
March 2024 Survey Results at a Glance:
- For a seventh straight month, the overall Rural Mainstreet Index sank below growth neutral to its lowest level since June 2020.
- Approximately three-fourths of bank CEOs indicated that their local economy was in a recession, or would enter a recession in the first half of 2024.
- Almost one in three bankers indicated that their bank had tightened credit standards on farm loans.
- Only 1.1% of bankers reported higher farm delinquency rates over the past six months.
- For the 52nd straight month, farmland prices expanded.
- The farm equipment sales index slumped below growth neutral for the ninth time in the past ten months to its lowest level since May 2020.
OMAHA, Neb. (March 21, 2024) — For a seventh straight month, the overall Rural Mainstreet Index (RMI) sank below growth neutral, according to the March survey of bank CEOs in rural areas of a 10-state region dependent on agriculture and/or energy.
Overall: The region’s overall reading for March fell to 38.0, its lowest level since June 2020, and down from 46.2 in February. The index ranges between 0 and 100, with a reading of 50.0 representing growth neutral.
“Higher interest rates, weaker agriculture commodity prices and higher grain storage costs pushed the overall reading to its lowest level since the early months of the pandemic,” said Ernie Goss, PhD, Jack A. MacAllister Chair in Regional Economics at Creighton University’s Heider College of Business.
As reported by Jeff Bonnett, CEO of Havana National Bank in Havana, Ill., “Our farm operators, like their peers across the cornbelt, are still storing 2023 crop awaiting at least break-even pricing. Without an upward push in commodity prices, the 2024 crop projections mirror 2023.”
Overall: The region’s overall reading for March fell to 38.0, its lowest level since June 2020, and down from 46.2 in February. The index ranges between 0 and 100, with a reading of 50.0 representing growth neutral.
“Higher interest rates, weaker agriculture commodity prices and higher grain storage costs pushed the overall reading to its lowest level since the early months of the pandemic,” said Ernie Goss, PhD, Jack A. MacAllister Chair in Regional Economics at Creighton University’s Heider College of Business.
As reported by Jeff Bonnett, CEO of Havana National Bank in Havana, Ill., “Our farm operators, like their peers across the cornbelt, are still storing 2023 crop awaiting at least break-even pricing. Without an upward push in commodity prices, the 2024 crop projections mirror 2023.”
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