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Before we officially enter into the summer months, let’s give Nebraska’s agricultural economy a check-up, so is time to take an honest look at how Nebraska’s agricultural economy is really doing this year.
Last week the Farm Bureau’s chief economist, Jay Remke, released his own assessment of how Nebraska’s agricultural economy is doing. According to Remke, the outlook is not good. Remke warned that Nebraska’s farms and ranches stand in danger of losing 3.7 billion dollars this year. The primary culprit for these losses being the COVID-19 restrictions.
To break it down, Remke estimates that the beef cattle sector of the economy could lose one billion dollars alone. Corn and soybean losses could total 1.2 billion dollars, and ethanol stands to lose another 1.3 billion dollars. Pork stands to lose 166 million dollars, dairy could lose 66 million dollars, and wheat could lose 9 million dollars. So, Remke’s outlook for Nebraska’s agricultural economy is not good for this year.
Creighton University economist, Ernie Goss, also weighed in on Nebraska’s agricultural economy last week. Goss referenced an economic index for a region comprised of 10 Plains and Western states. Accordingly, the economic index for the month of June was said to be 37.9, where any score below 50 points to a struggling or shrinking economy. Only 3 percent of bankers in the studied area reported economic growth. Goss blamed the poor report on low crop prices as well as the coronavirus restrictions.
There is some good news on the horizon. The good news is that the economic index score for May was only 12.5, so the score for June shows that the agricultural economy is at least moving in the right direction.
Some more good news relates to Nebraska’s unemployment rate. According to the Bureau of Labor Statistics, Nebraska now has the lowest unemployment rate in the nation. Nebraska’s unemployment rate currently sits at 5.2 percent. There are 54,879 workers who are unemployed in Nebraska, but this number has fallen from April’s high of 92,638 unemployed workers. While this is certainly good news, we should remember that the last time Nebraska experienced an unemployment rate this high was back in May 1983, which occurred in the middle of the farm crisis of the 1980’s.
So, the big question is this: Will Nebraska’s agricultural economy recover in time for farmers and ranchers to make ends meet? Nebraska ranks as the second worst state in the nation for farm and ranch bankruptcies, so the question remains open about whether or not we will be able to weather the current economic storm.
Because the coronavirus has made this a most unusual year for agricultural businesses in our state, I would like to encourage anyone with a small business, including farmers and ranchers, to apply for a Small Business Stabilization Grant. The State of Nebraska has appropriated some of the Cares Act monies into this program in order to help save our small businesses, farms, and ranches.
Last week I received several calls from farmers and ranchers who had trouble applying for these grants. The Nebraska Department of Economic Development temporarily shut down the program until Monday, June 22 due to concerns that too many applicants were being rejected. So, even if you were denied, please consider reapplying. Apply online at: https://getnebraskagrowing.nebraska.gov/