A monthly assessment of the rural economy released last week found recent Midwest flooding was taking its greatest economic toll on grain farmers and livestock operators.
Farm residences are suffering as well, according to the Rural Mainstreet Index (RMI), a monthly survey of bank CEOs in 10 states.
“The recent flood event has been devastating to southwest Iowa and eastern Nebraska,” said Larry Winum, CEO of Glenwood State Bank in Glenwood, Iowa.
“It has been a very frustrating process for homeowners, farmers and other businesses [that] have been unable to get into their homes or businesses because safety issues continue to be a concern.”
The survey also found that farmers are taking out loans at record levels.
“Borrowing by farmers for April surged as the borrowing index climbed to 81.3,” the highest level since 2006 when the index began, the report states. The previous record was set in March at 76.7.
In terms of financial stress for farmers, just over 20 percent of bankers said they expect the recent floods to increase farm loan defaults, while about 78 predicted little to no impact.
The survey did show a slight improvement in RMI’s confidence index, which reflects bank CEO expectations for the economy six months out. The figure hit 50.0 in April, up from 45.7 in March.
The survey's overall index, however, slipped to 50.0 in April from 52.9 in March.
In addition, “43.8 of bankers indicated that the recent floods were having a negative impact on their local economy,” said Ernie Goss, economic professor at Creighton University’s Heider College of Business, which produces the index.