May Rural Economic Index Shows A Difficult Spring For Farmers

May 21, 2020 - 6:26pm

According to Creighton University’s May Rural Mainstreet Index, Nebraska’s farmland value index slipped to 38.5 last month, with 50 indicating neutral growth.

Economist Ernie Goss says the new survey points to another month of financial crisis for farmers amid the COVID-19 pandemic. 73% of bankers said they’ve restructured farm loans for producers, many of whom have struggled to move product over the past few weeks. That's fueled a global oversupply of commodities and price drops.

“Since this time last year, livestock and grain prices have sunk by 19.1% and 4.7%, respectively.  Accordingly, approximately 73% of bankers reported restructuring farm loans. As a result of the restructuring,  bank CEOs expect farm loan defaults to expand by only 5.4% in the next 12 months,” Goss wrote in the report.

“What we need to see, of course, is rising agricultural commodity prices, and we're not seeing that right now."

But some farms could see up to 250-thousand dollars in aid from the USDA’s $19 billion coronavirus relief fund.

“It'll make a dent, but it will not replace the revenues that are lost. With a global economic downturn continuing, the agricultural sector has been particularly hard hit this time.”

But the report does offer some positive news, Goss added. Across the ten states surveyed, insured unemployment numbers have begun to stabilize. Between January and May, the statewide rate spiked from 0.5% to 7.1%.

"I think will return, and move forward. But it's not going to be a V shaped recovery as some have hoped for," Goss explained. 

While he expects conditions will improve slowly over the course of the next year, Goss added farmers should brace for several more months of uncertainty.



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