Rural Bankers: Ag Crisis & Rural Recession
Summary of the Agricultural Economic Report (November 2025)
This report paints a concerning picture of the agricultural economy in a 10-state region, indicating a weakening situation with potential for further decline. Here’s a breakdown of the key findings:
Overall Economic Health:
* Weakening Index: the overall regional economic index rose slightly to 44.0 (from 34.6 in October), but remains well below the growth-neutral level of 50.0 – its lowest since May 2020.
* Recession Concerns: 31.8% of bankers report their local economy is already in a recession. A further 30.9% anticipate a recession in 2026. Only slightly more than a third (33.3%) foresee solid growth continuing into 2026.
Key Indicators & Trends:
* Farmer Finances: 18.3% of farmers and ranchers are expected to experience negative cash flow in 2025. This is notably impacting row crop farmers.
* Exports Down: Regional agricultural exports are down 5.9% compared to last year ($7.8 billion to $7.3 billion).
* Farm Equipment Sales Plummeting: Farm equipment sales continue a 27-month decline, falling to 15.1 - significantly below growth neutral.
* Farmland Prices Declining: Farmland prices have slumped below growth neutral for 18 of the last 19 months, reaching 43.2. 58.3% of bankers expect further declines in 2026 (average 3.1%).
* Loan volume Decreasing: Loan volume is down, indicating reduced investment and activity.
* Checking Deposits Improving (Slightly): checking deposit index saw a small improvement.
Driving Factors:
* Low Commodity Prices: Weak agricultural commodity prices are a primary driver of the downturn.
* High Input Costs: High costs for grain producers are exacerbating the problem.
* Interest Rates: Elevated long-term interest rates are putting downward pressure on farmland prices.
* Debt Loads: Producers with heavy debt are particularly vulnerable to low crop prices.
* Tariffs & Volatility: market volatility from tariffs is negatively impacting farm equipment purchases.
Sector Differences:
* Livestock vs. Row Crops: Livestock farmers and ranchers (specifically cattle raisers) are currently in better financial condition than row crop farmers.
Quotes Highlight the situation:
* Joseph Anglin (Pioneer Bank): Cattle ranchers are faring better than row crop farmers.
* Jeff Bonnett (Havana National Bank): Rural businesses are struggling with tight cash flow, and the region is facing an “ag crisis” requiring relief. Businesses can’t sustain operating at a loss for extended periods.
* Jim Eckert (Anchor State Bank): Low crop prices are hurting producers, especially those with debt.
* Ernie Goss (Creighton University): Commodity prices and input costs are dampening economic activity.
the report signals a challenging period for agriculture in the region, with significant financial pressures on farmers and a pessimistic outlook for 2026.