A survey of rural bankers in ten Great Plains states says their biggest worry in the coming year is farm and ranch foreclosures.
Creighton University economist Ernie Goss said the problem is that beef and other agriculture commodity prices continue to be so low and that could lead to a fairly sharp upturn in foreclosures in 2018. Goss said Wyoming has a double whammy since energy prices continue to be sluggish, too. He said that in turn would hurt rural banks.
“It would really hammer their position and hurt the overall community, of course,” said Goss. These communities depend on agriculture, even the communities like Cheyenne and Casper where you've got a lot of spending that does come from the rural areas.”
The Creighton University Rural Main Street Index surveys 200 non-urban banks monthly in ten states including Illinois, Iowa, the Dakotas, Colorado, Wyoming and others, providing an up-to-date analysis of how rural middle America is doing economically. It shows that, in those states, farmland prices have dropped below growth neutral for the 47th month in a row.
Goss said another growing concern for rural bankers and the agriculture communities they serve is the re-negotiations going on over the North American Free Trade Agreement.
“The Trump administration, is now renegotiating NAFTA and, of course, those trade talks broke off yesterday and that's a significant risk for Wyoming, a significant risk for the other nine states who we've surveyed. Trade is very important. The idea that somehow we can just export and not import is just not realistic.”
Goss said Wyoming is in a particularly weak position since not only are beef, livestock and agriculture commodity prices remaining low but so are energy prices.