Federal Reserve survey: Weather concerns vary across Corn Belt

CHICAGO — Agriculture conditions varied across the nation’s Corn Belt, led by weather concerns, reported across Federal Reserve districts.

The survey-based Federal Reserve’s Beige Book checking the economic pulse based on information collected on or before July 13 noted overall economic activity “expanded at a modest pace, on balance, since mid-May, and contacts in five districts noted concerns over an increased risk of recession.”

The report summarizes comments received from contacts outside the Federal Reserve System and is not a commentary on the views of Federal Reserve officials.

Here are the agriculture-related comments from districts in the Corn Belt.

Chicago

“Contacts continued to expect agricultural incomes to be solid for most producers in 2022. Despite worries about supply chain problems, inputs were largely reaching farms in time,” according to the Federal Reserve Bank of Chicago.

Heavy rains in some areas diluted fertilizer and created ponds in fields, hurting potential yields; in other areas, there were concerns about dryness and heat. Still, corn and soybean conditions were close to average for much of the district.

Corn and soybean prices fell some over the reporting period, while milk prices were generally higher.

After widespread flock losses from bird flu, egg-laying capacity began to return and egg prices edged down from elevated levels. Hog and cattle prices increased.

Farmland prices moved higher once more.

The Chicago 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 declined moderately relative to the previous reporting period and the previous year.

In June, the percentages of corn, cotton, rice and soybeans rated fair or better decreased slightly to moderately across the district.

Most crop conditions declined moderately over this period relative to last year, except for rice, which increased modestly.

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

Agricultural conditions in the Ninth Federal Reserve District remained strong since the previous report.

Most of the region’s corn and soybean crops were rated in good or excellent condition and progressing on schedule.

However, nearly half of the Montana winter wheat crop was in poor or very poor condition, as drought conditions persisted in the Golden Triangle region.

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 district remained strong through June. Although the price of some key commodities declined slightly from the previous month, both crop and livestock prices remained at multiyear highs,” the report noted.

Agricultural prices continued to support revenue prospects, but district contacts continued to voice a heightened concern about significant increases in production costs for both crop and livestock producers.

Drought also remained a primary concern. The condition of corn and soybeans was only slightly weaker than a year ago in most states.

The condition of wheat in nearly all district states was exceptionally poor and could hinder revenues for many producers.

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