Prices, trade weighs heavily on ag sector

CHICAGO — Crop prices and trade policies remain among the top concerns across Corn Belt districts for the fourth straight Federal Reserve survey.

A summary of commentary on current economic conditions in the Federal Reserve Districts were published in the Beige Book, reflecting information collected on or before Aug. 25.

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 is what the Corn Belt districts reported regarding the agricultural conditions.

Chicago

District farm income prospects were little changed over the reporting period as outlooks for lower crop revenues were offset by stronger expectations for livestock earnings.

“Crops were in good shape across most of the district. Corn prices fell on forecasts for record corn yields and production. Soybean prices increased after a downward revision in estimates of the number of soybean acres planted, though there, too, forecasts were for record per acre yields,” the Seventh District reported.

“Nonetheless, contacts expressed concern about crop disease with the potential to damage enough plants to curtail harvests. Uncertainty over the international trade situation continued to raise concerns about soybean exports.”

Dairy prices were mixed, egg prices declined, hog prices were flat, but cattle prices increased to historic highs.

Farm machinery sales were described as “lackluster.”

Increases in fertilizer prices due to higher tariffs raised farmers’ concerns over financing costs for their 2026 operations.

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

Eighth District agriculture conditions have remained strained, but stable. One contact reported that while they were appreciative of additional government support, farming remained a very difficult business as all the major row crop prices were below farmers’ break-even production costs.

A farmer in western Kentucky shared that while soybean production was strong, they were prepared to store their production instead of selling it as usual, reflecting a weak market demand relative to production.

A large farm equipment dealer reported that defaults on payment for equipment were increasing and more farms were likely to fail this year. Nevertheless, most contacts do not expect a significant drop in land values.

Cattle farming contacts reported strong profits, but were not expanding due to the high cost of expansion and longer-term uncertainty.

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 remained weak.

“Preliminary estimates indicated strong expectations for crop yields and production in much of the district, given favorable weather and ample rainfall. However, crop prices were at or below break-even for many producers,” the report stated.

An industry contact reported that the threat of tariffs was having a major impact on fertilizer prices.

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 conditions in the Tenth District worsened slightly during early August. Profit opportunities for crop producers remained weak, and corn prices declined moderately over the past month alongside expectations of record U.S. production.

The majority of crops were in good or excellent condition and could support strong production levels, but low prices could limit revenues.

Conditions in the crop sector weighed on the farm economy, but an increase in cattle prices during recent weeks further strengthened income prospects for some producers.

Contacts throughout the district continued to cite low crop prices and elevated expenses as key factors weighing heavily on the outlook for farm financial conditions.

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