Ag Bankers Predict Recession for Rural Economy
There are a lot of metrics…numbers that we follow on a year-to-year basis and, honestly they kind of go unseen because seldom are there huge changes to them. However, in our current environment, that is not the situation. The June Rural Mainstreet Index from Creighton University sank into negative territory for the first time since September of 2020. The Index stretches from zero to 100, with growth territory at an index of 50 and above.
Dr. Ernie Goss is co-creator of the RMI. He says June’s reading of 49.8 is below growth neutral, a place the Index hasn’t been for some time. And, what’s more, he says an overwhelming majority of ag bankers in the survey are predicting recession for the rural economy…
“More than nine out of 10 bankers rank the probability of recession at more than 50 percent, so only seven percent rank the probability of recession at less than 50 percent. So, most of the bankers see a recession ahead, and that's, of course, a big problem for the small businesses and even some of the big businesses on rural Main Street.”
I don’t want to leave you on a negative note. So, when they interviewed those same bankers about income for 2022, they expect net farm income to grow between 12 and 13% from last year.