Bankers say increased farm loan foreclosures expected for next five years

Creighton University's latest Rural Mainstreet Index predicted a slumping agriculture economy with increased farm loan foreclosures. The RMI is a monthly survey of small bank presidents and CEOs in rural areas of 10 states with agriculture and energy-dependent economies. The 10 states are Colorado, Illinois, Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota, South Dakota, and Wyoming.

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 "As a result of weak farm income and low agriculture commodity prices, approximately 9.5 percent of bank CEOs expect farm loan foreclosures to pose the greatest threat to banking operations over the next five years," said Creighton economist Ernie Goss, who authors the study.

The bankers' outlook was pessimistic overall. "Concerns about trade, especially current NAFTA  negotiations, and low agriculture commodity prices impaired bankers’ economic outlook for the month," Goss said. In general, average farmland prices declined for the 47th straight month, and for the 50th consecutive month, farm equipment sales were well below growth neutral. And almost half of the bankers surveyed said that corn prices are too low for some farmers in their area to break even farming. Meanwhile, the hiring index for non-agriculture jobs increased to 57.3 from September's 55.9.

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