Federal Reserve survey: Corn Belt economic conditions improve slightly

MINNEAPOLIS — A Federal Reserve survey found agriculture conditions across the Corn Belt improved slightly, but generally remained strained.

The Federal Reserve’s Beige Book, published Sept. 2, is intended to characterize the change in economic conditions since the previous report was issued July 16.

This report was prepared at the Federal Reserve Bank of Minneapolis based on information collected on or before Aug. 24.

Each 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.

The Beige Book is not a commentary on the views of Federal Reserve officials.

Here are what the Corn Belt districts reported regarding the agricultural conditions.

Chicago

Seventh District farm income expectations for 2026 improved some from a low level over the reporting period.

“Crops were in good shape for the most part, though some areas were stressed due to heavy rains and flooding. Still, yields for corn and soybeans were expected to be close to record levels,” the report said.

“Corn, soybean and wheat prices increased as domestic and international demand strengthened.”

Strong demand for biofuels led to higher production of ethanol and biodiesel.

Egg and hog prices were up from the prior reporting period, dairy prices fell and cattle prices decreased further.

District cattle producers faced additional challenges after a key meat packing plant abruptly closed.

Although diesel prices rose, there were reductions in many fertilizer prices, which could help farmers when they turn to preparing for next year.

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 remain stressed, but have slightly improved since the previous report.

A contact in northwest Mississippi noted that the corn harvest produced good yields, while the outlook for cotton and soybeans hinges on the impact of recent heat waves.

According to a Mississippi farm equipment supplier, sales of new machinery are still weak, but farmer sentiment has improved, driven by higher crop prices and additional government support.

In Arkansas, a rice processor observed decreased rice demand due to increased imports, whereas a soy processor reported continuous crushing and refining operations fueled by strong demand.

Poultry demand continues to climb as consumers opt for more affordable protein sources; however, profit margins are being squeezed by rising input costs. An Arkansas poultry farmer shared that they were expanding capacity.

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 overall.

“Contacts expressed concern about the effects of drought on crop yields and quality in some parts of the district. Most of the corn and soybean crops in eastern parts of the district were in good or excellent condition. However, conditions were worse farther to the west in areas experiencing more dryness,” the report said.

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

A Minnesota lender noted that sugar beet growers experienced very large losses.

High cattle prices remained a source of strength in ranching areas.

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

Kansas City

Economic conditions in the 10th District crop sector were subdued while conditions in the livestock sector were strong.

“Profit opportunities for crop producers remained limited and crop conditions weakened alongside intensifying drought, which could further reduce revenues. The share of corn and soybean acres in good or excellent condition was below average, and crop quality was particularly weak in Nebraska and Kansas,” according to the survey.

Cattle prices declined in early August, but remained strong and continued to support profit opportunities for cow-calf producers.

According to contacts in the region, robust consumer demand for protein has provided broad support for the livestock sector and has contributed to large investments in dairy manufacturing facilities located in Kansas and smaller investments in facilities in New Mexico and Nebraska.

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