Commentary : liquidity and competition in rural credit markets

The loan to deposit ratios have been increasing from the mid-1980s until now. Also liquidity ratios have been tightening over the last few years. Immediately following the years of the agricultural crisis (mid-to-late 80s) agricultural borrowers were very cautious about incurring additional debt. However, the last few years we have seen much more debt being willingly added to the balance sheets of the rural borrower. In fact, as I researched some data prior to this presentation, I found that in Nebraska, loan to deposit ratios have increased 45 percent since 1987.