As the OmahaWorld Heraldreports, with corn prices at around $3.50 per bushel, grain farmers in Nebraska are increasingly exhausting their cash supplies and taking out loans.
Brad Bauer, a senior vice president at Pinnacle Bank, told the Herald that the demand for operating loans for farmers in Nebraska has increased because many producers have exhausted their cash reserves.
The same is true in other High Plains states.
According to research by the Kansas City Federal Reserve, which serves Nebraska, Kansas, Colorado, Oklahoma and three other states, the number of farmers taking out operating loans over the past year was at the highest level ever recorded.
The last few years have been difficult for many farmers. There is currently a 611-billion-bushel oversupply of grain globally, which has brought down grain prices. This surplus is so large that some farmers think it will take a catastrophic event, such as a major drought, to bring grain prices back up.