Corn Belt farm bill, trade uncertainties continue

CHICAGO — Agricultural economic conditions remained relatively weak across the Corn Belt, driven by concerns over drought conditions, trade, balance sheets and the lack of farm bill clarity.

A summary of commentary on current economic conditions by Federal Reserve District was published in the Beige Book on March 5, reflecting activity since mid-January.

Each Federal Reserve Bank gathers information on current economic conditions in its 12 districts through reports from bank and branch directors, plus interviews and online questionnaires completed by businesses, community organizations, economists, market experts and other sources.

Here are what the Corn Belt districts reported regarding the agricultural conditions:

Chicago

“Farm income for Seventh District crop producers in 2025 was expected to be similar to 2024, though livestock producers could fare better. Contacts noted higher-than-normal uncertainty given potential for federal policy shifts, especially regarding trade,” the report stated.

“Corn, soybean and wheat prices increased during the reporting period that began in mid-January, leading many farmers to sell stored crops at higher prices than were available during harvest.”

Major shipping challenges that farmers confronted in late 2024 were largely resolved, though there were still some train delays to Mexico.

While input costs were stable for most products, prices for some fertilizers rose. Contacts noted an acceleration in the use of precision farming technologies, which can lower input costs and improve yields.

Cattle, hog and cheese prices rose, while milk prices declined. Egg prices hit record levels as avian influenza continued to reduce the number of laying hens.

Contacts reported signs of greater financial stress among farm borrowers as delinquencies edged up, but said that most problems could be resolved with modest loan restructuring. Financing for farm operations was seen as readily available.

The Seventh Federal Reserve District of Chicago 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 have deteriorated since the January report and remain historically weak in the Eighth Federal Reserve District.

“A contact in Memphis noted that the current agriculture market was in a worse spot than the same time last year, with low cash flows due to high input costs and low commodity prices,” the report stated.

“Contacts noted that tariffs, policy uncertainty and lack of clarity regarding farm bill safety nets were negatively impacting the sector. Some farmers also reported having no expectation of profits in the 2025 crop year, and others have gone out of business.”

Bankers expressed concern about this sector, noting that they must be cautious; many have tightened their credit standards for agriculture lending.

Farmers in northwest Tennessee reported they would have to clean farms before planting could take place this year due to major flooding in the area.

The Eighth Federal Reserve District of St. Louis 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 were steady at weak levels. Some contacts expressed concern about the possibility of widespread drought conditions persisting into the growing season.

A contact reported that turkey producers in the region were “in a good place” with respect to the impact of H5N1 avian influenza due to investments in bio security.

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

Conditions in the Tenth Federal Reserve District agricultural economy improved slightly, but remained relatively weak. Crop prices increased moderately in January, but profit opportunities were still narrow.

Strong cattle prices continued to support profits among producers. However, low cattle inventories have been a challenge for beef processors.

“Contacts in several industries cited recent developments related to trade policy as a key concern, noting the potential for price volatility and uncertainty about the stability of current trade relationships. Those concerns about trade policy weighed on reported sentiment overall, but contacts noted the planned ad-hoc assistance associated with the American Relief Act will provide broad support to the farm sector that could mitigate financial stress for some producers,” according to the survey.

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