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Survey shows surge in farmer borrowing

The Rural Mainstreet Index, a monthly survey of bank CEOs in the Midwest, shows a surge in borrowing by farmers.

The survey’s “borrowing index” for April reached its highest level since the survey began in 2006.

Creighton University economist Ernie Goss, who coordinates the survey, says the March floods, tariffs and trade tensions, and anemic farm income were the big concerns. And Goss fears the ongoing financial stress will lead to even more consolidation of farms.

“You’re apt to see larger and larger farms because of some of the financial pressures from low commodity prices, and also the floods, contributing to the smaller farmers either selling or even not doing business next year,” Goss says.

Twenty-two percent of the bankers surveyed expect an increase in farm loan defaults stemming from the recent floods, Goss says.