Ag economic conditions vary across Corn Belt

CHICAGO — Corn Belt agricultural conditions ranged from weak to slightly favorable in the latest Federal Reserve’s Beige Book.

A summary of commentary on current economic conditions by Federal Reserve District was published on June 4, reflecting activity since mid-April and based on information collected on or before May 23. This issue was prepared by the Federal Reserve Bank of St. Louis.

The Beige Book is intended to characterize the change in economic conditions since the last report.

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

“Contacts are not selected at random; rather, banks strive to curate a diverse set of sources that can provide accurate and objective information about a broad range of economic activities,” the report states.

Here are highlights from the Corn Belt districts.

Chicago

“Expectations for 2025 farm income in the Seventh District increased slightly on balance over the reporting period despite ongoing uncertainty about agricultural trade. Income expectations rose for livestock operations, but were flat for crop producers. That said, there were reports of large crop and hog operators scaling back or ceasing operations,” the report noted.

Corn and soybean planting proceeded quickly in much of the Seventh District, though the southern portions faced excessive precipitation which could lead to fields needing to be planted after the window for optimal yield.

Corn prices decreased while soybean prices increased. Hog, cattle and dairy prices rose, and egg prices declined.

“Contacts reported concerns about the loss of access to agricultural financing for heavily leveraged operators or those unable to pay off 2024 loans. There were limited sales of new farm machinery given high prices,” according to the report.

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

Agriculture conditions have remained unchanged since our previous report in the Eighth District. Wet soil conditions continue to delay planting in some areas. Despite these delays, overall acres planted remain consistent with prior years.

Contacts noted that continued delays accessing fields will result in a shift in planting away from corn and toward soybeans.

Contacts expressed uncertainty over the cost and availability of feed ingredients and chemicals sourced outside the United States.

Demand for credit remains elevated. However, obtaining loans at affordable rates remains a top concern.

A cotton industry contact expects demand from retailers will weaken over the next few months.

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

Ninth District agricultural conditions continued weak overall, but planting season was going well.

According to the most recent Ag Credit Survey, 80% of respondents reported that farm incomes decreased in the first quarter from a year earlier, as low commodity prices continued to weigh on farm operations.

However, corn, soybean and spring wheat planting progress and emergence in district states as of mid-May were well ahead of average.

Persistent drought conditions were causing concern among contacts, particularly in the western portion of the Ninth District.

Oil and gas exploration activity and production decreased slightly since the previous report.

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 District farm economy remained weak through early May. Corn, soybean and wheat prices remained low and kept profit opportunities narrow for most producers.

Winter wheat conditions in Colorado, Kansas and Oklahoma were near historic averages, but the crop in Nebraska was particularly poor and raised concerns about reduced revenues in those areas.

Soil conditions for corn and soybeans were ideal in most of the region, and planting was pacing near or ahead of typical trends in all district states.

In the livestock sector, cattle prices increased over the past month and continued supporting profit opportunities for cow-calf producers.

District contacts mentioned payments from the Emergency Commodity Assistance Program could bolster liquidity for many crop producers, but profitability for crops in the year ahead remained a key concern.

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