Farmers are still bingeing on credit, with lending to agriculture up another 22% in November, compared with the same month a year earlier. This was the third month in a row that rural credit growth has exceeded 20%, and over the last twelve months farmers have borrowed an extra $7.8 billion from financial institutions.

There is a clear credit bubble in rural lending.

Much may have been loaned on the basis of high dairy prices.

In contrast, consumers are showing much more restraint (or banks are applying stricter credit criteria). Consumer credit grew only 0.7% year-on-year in November, showing how fast changed prospects can affect lending activity.