Fed survey sees little change in ag conditions

ATLANTA — Agricultural conditions improved or deteriorated slightly since the previous Beige Book report in October, depending on the Federal Reserve district.

The Federal Reserve System publication released Nov. 29 focuses on the current economic conditions across the 12 districts nationwide.

Information for the Beige Book was prepared at the Federal Reserve Bank of Atlanta based on information collected on or before Nov. 17.

The document summarizes comments received from contacts outside the Federal Reserve System and is not a commentary on the views of Federal Reserve officials.

Chicago

Projected farm income in the Seventh Federal Reserve District was little changed over the reporting period as both expenses and expected revenues moved lower.

Despite widespread drought, there were reports of record yields across multiple states and crop types, including corn, soybeans, tomatoes and wheat. One contact mentioned that early and dry spring planting contributed to better than expected crop yields.

Corn and soybean prices dropped to their lowest levels in over two years, while wheat prices were flat. Costs were lower for key crop inputs, including fuel and fertilizer.

Egg prices edged up, milk prices were flat and butter prices were down. Cattle and hog prices both declined.

The Chicago-based Seventh Federal Reserve District includes the northern two-thirds of Illinois and Indiana, all of Iowa, the southern two-thirds of Wisconsin and Michigan’s Lower Peninsula.

St. Louis

Agriculture conditions in the Eighth Federal Reserve District have improved slightly since the October previous report.

Yields for the district’s primary commodity crops were at or moderately below 2022 levels. Despite this slight decline, total corn production in the district rose relative to last year.

Rice production also rose, reaching levels over 33% higher than in 2022, while soybean production dipped slightly below 2021-22 levels and cotton production returned to 2021 levels.

Commodity crop prices fell, but remained at or above typical levels for the 2015-2020 period and stayed relatively stable throughout the reporting period.

District contacts reported a mixed outlook, but were generally less pessimistic than in previous reports. A Louisville contact attributed the moderate improvement in outlook to higher than expected yields and prices for crops such as corn and soybeans.

The St. Louis-based district includes the southern parts of Illinois and Indiana and eastern half of Missouri, as well as parts of Tennessee, Arkansas, Kentucky and Mississippi.

Minneapolis

Ninth Federal Reserve District agricultural conditions deteriorated slightly since the last report.

Despite better-than-expected crop production, lenders responding to the district’s third-quarter survey of agricultural credit conditions reported lower farm incomes and capital spending over the period relative to a year earlier.

Contacts expressed concern over the impact of rising interest costs as borrowing increases.

The Minneapolis-based district includes all of Minnesota, the Dakotas and Montana, the northern one-third of Wisconsin and Michigan’s Upper Peninsula.

Kansas City

The agricultural economy and farm credit conditions in Tenth Federal Reserve District softened last month alongside a moderate decrease in agricultural commodity prices.

Agricultural bankers reported borrower liquidity deteriorated slightly from strong levels, and loan repayment rates were slightly lower than a year ago.

Farm income declined faster in areas with more intense drought and more corn and wheat production. Agricultural real estate values remained firm.

Cattle prices remained strong, supporting credit conditions in other portions of the district. Contacts cited elevated production expenses and high financing costs as ongoing concerns.

The Kansas City-based district includes the western part of Missouri, Kansas, Nebraska, Oklahoma, Wyoming, Colorado and the northern New Mexico.