Rural Mainstreet Index shows impact of tariffs; nearly 1/3 of bankers say they're turning down more farm loans

Creighton University's latest Rural Mainstreet Index is above growth-neutral for the seventh straight month because of an expanding economy outside of agriculture. "However, the negative impacts of recent trade skirmishes have begun to surface, weakening already anemic grain prices," said Ernie Goss, the economist who compiles the RMI. The RMI is a monthly survey of small bank CEOs in rural areas of 10 states with agriculture and energy-dependent economies: Colorado, Illinois, Iowa, Kansas, Minnesota, Missouri, Nebraska, the Dakotas and Wyoming.

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Citing weak commodity prices and farm income, almost a third of bank CEOs reported rejecting more farm loans, and more than half support cutting the recent tariffs on Chinese products that prompted China to retaliate with tariffs on U.S. products such as soybeans and corn. Bankers also reported a decline in the sale of agriculture equipment, and expect sales to decline another 7.8 percent over the next year.

Jim Stanosheck, CEO of State Bank in Odell, Neb., told Goss: "The tariffs have and are costing our ag customers on grain prices and items they must purchase. Talking to one of my customers this morning, he thought that maybe the tariffs would bring about better prices in the future."

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