December 10, 2023

Federal Reserve survey: Early harvest results better than expected

ST. LOUIS — The impact of drought conditions across much of the Corn Belt on crops and water transportation were a common theme in the Federal Reserve’s recent survey.

The results were published in the Beige Book, a Federal Reserve System publication released Oct. 18 that focuses on the current economic conditions across the 12 districts.

Information was gathered at the Federal Reserve Bank of St. Louis based on information collected on or before Oct. 6.

“The document summarizes comments received from comments outside the Federal Reserve System and is not a commentary on the views of Federal Reserve officials,” the report said.


Projected farm income in the Seventh District for 2023 remained well below 2022 levels, as lower crop prices offset positive news from early harvested acres.

Notably, corn and soybean prices continued to fall, while yields were coming in above earlier expectations, which had been pessimistic due to the ongoing drought.

Cattle prices moved higher, but growth slowed some. That said, one contact reported that with the exception of beef, many animal operations were experiencing below breakeven prices.

Egg prices were flat, while dairy prices were mostly higher.

Prices for agricultural land showed signs of softening, especially for ground of lesser quality.

Rising interest rates stretched farm finances given high debt levels of many operators.

The Seventh 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

Overall agricultural activity has remained stable since our previous report, though contacts’ outlook for future conditions was mixed.

Corn and cotton yields across the Eighth District fell slightly below 2022 levels, while rice and soybean yields hovered slightly above. Corn and rice production increased relative to this time last year, but cotton and soybeans decreased.

Low water levels meant that barges needed to float at a lower weight, which raised shipping costs.

Due to elevated storage and transport costs, some contacts stated they planned to leave their crop in the field rather than harvest.

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.


Ninth District agricultural conditions strengthened slightly since the previous report.

Drought conditions moderated in parts of the district, but persisted in the eastern and northern regions.

Industry contacts reported that early indications of crop production were better than expected, given weather conditions.

However, farm incomes decreased from a year earlier in the third quarter, according to preliminary results of the Minneapolis Fed’s survey of agricultural credit conditions.

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 10th District farm economy softened alongside further declines in commodity prices and prolonged drought.

As harvest began in some areas, at least one-third of corn and soybean acres were in very poor condition, raising concerns about yields and revenue.

Dry conditions across the nation also reduced water levels in the Mississippi River, disrupting barge traffic along many Gulf port routes and heightening concerns about freight costs and export activity.

Cattle prices continued to be supported by low inventories, but drought also constrained hay supply in many areas, raising costs for ranchers.

Interest rates were another key concern cited by agricultural contacts, as producers faced significantly higher financing costs.

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

Tom Doran

Tom C. Doran

Field Editor