Trade policy concerns continue across districts

CHICAGO — Agricultural economic conditions varied by districts while trade policy uncertainties remain across the Corn Belt.

A summary of regional economic conditions were recently published in the Federal Reserve System’s Beige Book.

The Beige Book, which is not a commentary on Federal Reserve officials’ views, gathers information on current economic conditions through reports from bank and branch directors, plus interviews and online questionnaires completed by businesses, community organizations, economists, market experts and other sources.

The summary reflects economic conditions from early March through mid-April.

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

Chicago

Farm income expectations for 2025 for the Seventh Federal Reserve District were largely unchanged, though there was greater uncertainty due to trade policy announcements.

“Contacts expressed concerns about potentially losing export markets but also mentioned that greater purchases of agricultural products could be a way for some countries to lower trade deficits with the US. Corn, soybean and wheat prices decreased,” the report noted,

Contacts expected slightly more corn acres to be planted instead of soybeans given relatively favorable price movements for corn and a perception of greater export exposure for soybeans.

While input prices for farmers rose some, vendors had cut financing rates to incentivize sales, in some cases down to 0%.

Cattle prices increased, while egg, dairy and hog prices decreased. Contacts reported that livestock operations were in better financial shape than crop operations.

There were limited sales of new farm machinery.

The Seventh Federal Reserve Districtof 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

Wet soil conditions combined with significant rainfall delayed planting in the Eighth Feral District. In some areas, flooding will require replanting of crops. While operating incomes for row-crop farms are expected to be negative in 2025, government supports are expected to offset losses.

The outlook for meat and poultry producers is more favorable due to low feed prices and stable demand, particularly for home consumption.

Contacts reported elevated levels of uncertainty regarding the economic outlook and trade policy but have not made any significant changes to their operations.

The St. Louis-based 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

“District agricultural conditions remained weak heading into planting season,” the report stated.

Grain producers continued to struggle due to low commodity prices, while cattle operations were stronger.

Industry sources were concerned about widespread drought conditions because, as one contact noted, “liquidity on balance sheets is gone and another bad year would be very difficult to survive for most farmers.”

The Minneapolis-based Ninth Federal Reserve 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 Tenth Federal Reserve District farm economy weakened early in April.

“Prices for several key commodities declined alongside increased uncertainty surrounding export prospects. Profit opportunities for crop producers remained limited,” according to the report.

In the latest survey of agricultural credit conditions, lenders reported gradual deterioration in farm loan repayment rates and notable increases in carryover debt and loan restructuring compared to a year ago. Credit conditions weakened comparatively more in portions of the district most heavily concentrated in crop production, while strong cattle prices supported farm finances in other areas.

Production costs, elevated living expenses, and further declines in working capital were cited as key concerns, with some contacts noting that more highly leveraged borrowers were selling longer-term assets to improve liquidity.

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