As we begin a new year, the Creighton University Rural Mainstreet Index may give us a glimpse into what to expect from the Agricultural economy in 2025. The Index compiles the views of about 200 rural bankers concerning what they expect will happen in the economy over the next six months. The findings point out that for the 11th time in 2024, the Index dropped below growth neutral, which indicates that bankers are concerned that the rural economy may face some tough sledding in 2025. They cite that for the 7th time in the past eight months, farmland prices have declined, and that farm equipment sales dropped for the 17th straight month. But on average, farm loan delinquency rates rose only 1.2%. However, approximately one in five bank CEOs expect a recession in 2025. Another positive statistic is that according to data from the International Trade Association, regional exports of agriculture goods and livestock for 2024 year-to-date rose almost $10 billion from $9.71 billion during the same period in 2023, a 2.8% gain. But, almost 25% of bankers point out that their banks had raised credit standards over the past 12 months.
While a Farm Bill extension was part of the stopgap government legislation passed in December of 2024, Congress needs to pass a new farm bill bill before the end of September, since numerous programs like the Feral Swine Eradication and Control Pilot Program and Emergency Citrus Disease Research are just two of the many agricultural programs that have lost funding under the Farm Bill extension legislation.
Other bugaboos that may affect farmers and ranchers in 2024 include the imposition of tariffs with trading partners that could cause trade wars to develop, and the Corporate Transparency Act, which was supposed to take effect on January 1st of 2025. This act was passed in 2021 and was designed to stop illegal financial activities. It went unnoticed until a few months ago, when confusion about what types of businesses were required to file a beneficial ownership information report with the Financial Crimes Enforcement Network, a bureau of the U.S. Department of the Treasury. The title of the Act would cause one to assume that it targeted corporations, but there appears to be a lot of confusion about what business entities were required to register. One of the criteria that was posed in midsummer indicated that if a company had registered their business with a Secretary of State's office, they were required to register their business with the U.S. Department of Treasury. That would seem to exempt most farms from needing to register their operation under this Act. But There have been a few conflicting court decisions, then the fifth U.S. circuit court of appeals ordered that the law would take effect and farmers would have until Jan. 13 to register. But the Fifth U.S. Circuit put another hold on implementing the law’s requirements, and supposedly, the Court will take another look at the Act’s requirement in March. American Farm Bureau Federation President Zippy Duvall called the legal back and forth “court ordered whiplash.” But he said that the Farm Bureau appreciates the court’s recognition that a last-minute reinstatement of the reporting requirements caused an unwelcome scramble for farmers and other small businesses, and that “Lack of guidance and poor public outreach from the government have left many farmers in the dark about whether they’re expected to file.”
Ben Franklin wrote, ”Many complain of their memory, few of their judgment.”
