May Survey Results at a Glance:
- For the first time since November the Rural Mainstreet Index (RMI) fell below growth neutral.
- Bank CEOs project the percentage of farm loan defaults over the next 12 months will double the default rates for 2017.
- In reaction to weak farm income, almost two-thirds of bankers have increased collateral for farm loans.
- More than one in four bankers reports rejecting a higher percentage of farm loans due to declining farm income.
- The economic confidence index dropped to its lowest level in almost two years.
OMAHA, Neb. (May 16, 2019) – The Creighton University Rural Mainstreet Index (RMI) for May slumped below growth neutral for the month. According to the monthly survey of bank CEOs in rural areas of a 10-state region dependent on agriculture and/or energy, the RMI for May indicated negative growth for the month for the region, after five months of growth.
Overall: The overall index for May slipped to 48.5 from 50.0 in April. This is the first time since November of last year the index has fallen below growth neutral, indicating negative growth for the month. The index ranges between 0 and 100 with 50.0 representing growth neutral.
“The trade tensions and tariffs are hammering the farming economy. Grain farmers throughout the region continue to experience losses produced by trade issues and plentiful global supplies. On the other hand, the expanding U.S. domestic economy is supporting livestock producers in the region. For May, according to bankers, the negatives far outweighed the positives,” said Ernie Goss, PhD, Jack A. MacAllister Chair in Regional Economics at Creighton University’s Heider College of Business.
According to Lonnie Clark, president of the State Bank of Chandler in Chandler, Minnesota, “The current low farm commodity prices are a negative to farmers.”
Overall: The overall index for May slipped to 48.5 from 50.0 in April. This is the first time since November of last year the index has fallen below growth neutral, indicating negative growth for the month. The index ranges between 0 and 100 with 50.0 representing growth neutral.
“The trade tensions and tariffs are hammering the farming economy. Grain farmers throughout the region continue to experience losses produced by trade issues and plentiful global supplies. On the other hand, the expanding U.S. domestic economy is supporting livestock producers in the region. For May, according to bankers, the negatives far outweighed the positives,” said Ernie Goss, PhD, Jack A. MacAllister Chair in Regional Economics at Creighton University’s Heider College of Business.
According to Lonnie Clark, president of the State Bank of Chandler in Chandler, Minnesota, “The current low farm commodity prices are a negative to farmers.”
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