Corn Belt ag economic conditions subdued

CHICAGO — The agricultural economic outlook across the Corn Belt’s Federal Reserve Districts remain subdued, according to a survey published July 16.

A summary of commentary on current economic conditions was published in the Federal Reserve District’s Beige Book, reflecting activity since late-May based on information collected on or before July 7.

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

“Expectations for 2025 farm income were little changed over the reporting period, with an improved outlook for livestock operations offsetting worse prospects for crop operations,” the report said.

“Corn and soybean crops got off to good starts in most of the Seventh Federal Reserve District, although progress lagged in much of the southern part of the district due to late planting.”

Costs for agricultural services, such as spraying, were higher, and as a result, contacts expected to use less fertilizer and pesticides during the growing season.

Contacts noted that even though trade uncertainty had eased, they continued to be concerned about the potential for losing some export opportunities.

Corn and soybean prices fell over the reporting period. Hog, cattle and milk prices increased, while egg prices decreased again.

The Chicago 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

Eighth Federal Reserve District agriculture conditions have remained strained. Contacts shared that sales in June were down and that forecasts for the rest of the year were weak.

Farmers in Arkansas were concerned that poor crop conditions would limit yields, making it more difficult to generate a profit with low commodity prices.

Some farmers reported reducing fertilizer usage due to tight budgets and others are still trying to find additional financing to make it to harvest.

“An accountant reported reducing billing rates for all their farmers this season due to concerns about their financial stability,” the report said.

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 Federal Reserve District agricultural conditions remained weak overall, but crop progress was solid in much of the district.

According to preliminary results from the most recent Ag Credit Survey, a strong majority of respondents reported that farm incomes decreased in the second quarter from a year earlier.

The majority of corn and soybeans were in good or excellent condition, and most of the eastern portions of the 8th District were free of significant drought. However, drier conditions prevailed further west, and wheat conditions were weaker.

An ethanol producer described demand as steady.

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

Kansas City

The Tenth Federal Reserve District farm economy remained subdued and agricultural credit conditions deteriorated slightly.

Prices of major row crops remained low and kept profit opportunities narrow for most producers.

Farm loan repayment challenges across the district increased slightly compared with the previous year, with weakening in repayment more pronounced in areas most heavily concentrated in crop production. In other areas, strong cattle prices continued to provide some support to farm finances.

A lender in Kansas noted that strength in the cattle market was supporting diversified farming operations and keeping them afloat.

“Looking ahead, weak crop profits remained a key issue cited by producers, as well as uncertainty surrounding the outlook for global trade, domestic demand and elevated concerns about financial conditions in the coming year,” the report said.

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