February 27, 2024

Ag conditions remain steady: survey

RICHMOND, Va. — Agricultural conditions were reported to be stable to strong across the Corn Belt, according a survey of Federal Reserve districts.

Survey results were published in the Federal Reserve’s Beige Book on April 19. The report was prepared at the Federal Reserve Bank of Richmond based on information collected on or before April 10.

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

Here are the agricultural-related comments from districts in the Corn Belt.

Chicago

“With input costs remaining elevated and many product prices down, contacts expected lower agricultural income for the district in 2023 compared with a strong 2022,” the report stated.

Wheat prices were generally lower over the reporting period, during which the agreement for exporting grain from Ukraine was extended into May.

Corn and soybean prices were also lower despite smaller estimates for the South American harvest.

Planting delays were likely in some places in the district due to excess precipitation, though contacts noted the extra moisture could also recharge ground water levels for use later in the growing season.

Although fertilizer costs fell, the cost of most other inputs remained high for crop farms.

Cattle prices increased as the U.S. herd was squeezed by drought and a harsh winter. Egg prices moved up, while dairy and hog prices were down. High feed costs continued to compress most livestock margins.

Prices for agricultural land continued to rise, reportedly at a slower pace.

The 7th 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

The 8th Federal Reserve District agriculture conditions have seen little change since the previous report.

The number of acres planted in the district for corn, cotton, rice and soybeans increased around 1% compared with last year; outcomes were similar for all district states.

The composition of the crops has changed; cotton and soybeans were planted in lesser quantities compared with last year, while corn and rice increased in acreage.

Southern parts of the district have planted significantly fewer acres of cotton and replaced it with corn and rice.

The St. Louis Federal Reserve 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

District agricultural conditions were stable at strong levels entering the planting season. Most contacts reported that farm incomes continued to increase from a year earlier, while capital spending was steady.

However, persistent wintry weather, including a severe snowstorm, delayed preparation for spring planting in many areas.

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

Agricultural economic and credit conditions in the 10th District were reportedly strong. Elevated commodity prices continued to support profit opportunities for many producers.

Farm loan repayment rates improved at a gradual pace in the first quarter and indicators of credit challenges were limited.

“Agricultural bankers throughout the region also reported that their liquidity was adequate to meet current credit demand and deposit withdrawals. The impact of higher interest rates on borrower finances and farmland markets was reportedly a growing concern,” the report noted.

More broadly, drought and elevated production costs continued to affect many areas of the region.

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

Tom Doran

Tom C. Doran

Field Editor