Federal Reserve survey: Price, input cost concerns continue

CHICAGO — Overall agricultural conditions in the Corn Belt continue to be dampened by lower commodity prices, higher input costs and tighter credit.

The Federal Reserve System’s Beige Book, released July 15, summarizes survey comments collected on or before July 6 on economic activities from late May through the end of June.

Each Federal Reserve Bank gathers information on current economic conditions in its district through reports from banks and branch directors, plus interviews and online questionnaires completed by businesses, community groups, economists, market experts and other sources.

The information from contacts supplements the data and analysis used by Federal Reserve economists and staff to assess economic conditions in the Federal Reserve Districts.

The qualitative nature of the Beige Book creates an opportunity to characterize dynamics and identify emerging trends in the economy that may not be readily apparent in the available economic data.

This information enables comparison of economic conditions in different parts of the country, which can be helpful for assessing the outlook for the national economy.

Here are the comments from Federal Reserve Districts in the Corn Belt on agriculture conditions.

Chicago

Expectations for 2026 Seventh District farm income deteriorated some in late May and June as crop prices faltered and most livestock prices were flat.

Corn, soybean and wheat prices all declined. Egg and hog prices were flat overall, while cattle prices decreased some from elevated levels.

Dairy prices were down on balance. Contacts noted that cheese production increased, in part because of rising demand for whey protein, a cheese byproduct.

Corn and soybean crops were progressing well across most of the district.

“Production of new farm equipment slowed, spurring sales of used equipment and helping to reduce elevated used inventories. Contacts reported that farm equipment repair activity was much higher this year as a consequence of aging equipment fleets,” the report said.

Prices for fertilizer and fuel purchases dropped as transportation blockages eased in the Middle East, although it is not a major season for farm purchases of these items.

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

Agriculture conditions remain largely unchanged from the previous Beige Book released in late May.

“A banker reported that farm operations are holding steady, with no significant uptick in loan delinquencies. In contrast, a rural lender in northwest Arkansas noted that drought and reductions in federal funding have sharply reduced farm productivity and revenue,” according to the report.

“A lumber producer described favorable weather and said they have expanded work hours to meet their supply commitments.

“Meanwhile, an agribusiness contact expressed pessimism about the outlook for row-crop farming — particularly rice — observing that several farmers are uncertain whether they will be able to continue operating.

“Credit conditions remain tight for some growers, as certain financial institutions have become more hesitant to partner or share risks on farm loans.”

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

Though crop progress and conditions were generally good, Ninth District agricultural conditions worsened slightly since the last report.

Corn and soybean progress was on par with their averages in District states, and most crops were in good or excellent condition, but wheat in Montana and South Dakota was mostly in fair or worse condition.

Contacts reported that a recent sell-off in commodities was having a depressing effect on already-low crop prices.

“Farmers are selling out due to poor markets and inability to get operating loans,” commented a Minnesota farm operator.

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

Strength in the cattle sector continued to support the Tenth District farm economy, but ongoing weakness in the crop sector weighed on conditions in many areas.

Cattle prices stayed near record highs and contacts in many parts of the region reported that strong calf revenues were supporting farm finances and credit conditions.

Profit opportunities for crops remained limited and lenders noted the outlook for the sector was an ongoing concern.

Drought also intensified in the southern and western portion of the region and was mentioned as a key risk for crop and livestock producers.

Despite ongoing challenges for many operations, deterioration in agricultural credit conditions and loan performance was modest during the most recent survey period and farmland values were stable.

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