September 28, 2023
Mike Pearson tells us about the state of the farm economy as a result of a survey.
As the combine begin to roll in the upper Midwest, bankers are not hiding they are uneasy about the economy.
A recent survey from Creighton University shows most bankers expect the economy to soften soon.
The Rural Mainstreet Index which is combined of bank executives in 10 states that depend on agriculture and energy in the upper Midwest confirmed the results.
The bankers are asked to rate the economy and they came back with a 49.5 rating on the growth neutral index. This is below the growth level and shows the economy is worsening.
For farmers it means their income is dropping and for lenders, it means that the interest rate margin is not enough for profits.
It's the weakest reading since March.
The bankers say they expect a decline in farm profitability and expect it to worsen in the next six months.
The biggest challenge for bank leaders is the interest rate increases and 36 percent say they are the biggest challenge to banking operations over the next year.
The bank executives say the banking crisis from earlier this year is not over and expect more this year.
The interest rates were left alone this past week but an increase by the end of the year is possible.
Farm Progress America is a daily look at key issues in agriculture. It is produced and presented by Mike Pearson, farm broadcaster and host of This Week in Agribusiness.
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