The Federal Reserve Board on Wednesday released its periodic Beige Book with commentary showing weakness in the agricultural economy.
“Reports across the 12 Federal Reserve Districts indicate that economic activity has declined slightly since the previous report,” the Fed said in a national summary.
The report contains sections from each of the regional banks, and six of them included commentary on agricultural conditions.
The Chicago bank said, “Expectations for 2025 farm income increased slightly on balance over the reporting period despite ongoing uncertainty about agricultural trade. Income expectations rose for livestock operations but were flat for crop producers. That said, there were reports of large crop and hog operators scaling back or ceasing operations. … Contacts reported concerns about the loss of access to agricultural financing for heavily leveraged operators or those unable to pay off 2024 loans. There were limited sales of new farm machinery given high prices.”
The St. Louis bank said, “Agriculture conditions have remained unchanged since our previous report. Wet soil conditions continue to delay planting in some areas. Despite these delays, overall acres planted remain consistent with prior years. Contacts noted that continued delays accessing fields will result in a shift in planting away from corn and toward soybeans. Contacts expressed uncertainty over the cost and availability of feed ingredients and chemicals sourced outside the U.S. Demand for credit remains elevated; however, obtaining loans at affordable rates remains a top concern. A cotton industry contact expects demand from retailers will weaken over the next few months.”
The Minneapolis bank said, “District agricultural conditions remained weak overall, but planting season was going well. According to the most recent Ag Credit Survey, 80% of respondents reported that farm incomes decreased in the first quarter from a year earlier, as low commodity prices continued to weigh on farm operations.”
The Kansas City bank said, “Conditions in the Tenth District farm economy remained weak through early May. Corn, soybean and wheat prices remained low and kept profit opportunities narrow for most producers. Winter wheat conditions in Colorado, Kansas and Oklahoma were near historic averages, but the crop in Nebraska was particularly poor and raised concerns about reduced revenues in those areas. Soil conditions for corn and soybeans were ideal in most of the region, and planting was pacing near or ahead of typical trends in all district states. In the livestock sector, cattle prices increased over the past month and continued supporting profit opportunities for cow/calf producers. District contacts mentioned payments from the Emergency Commodity Assistance Program could bolster liquidity for many crop producers, but profitability for crops in the year ahead remained a key concern.”
The Dallas bank said, “Drought conditions eased in much of the district, though some western areas remained in extreme drought. Ample moisture in crop-growing areas supported favorable planting conditions and led to optimism for production this year, though continued timely rains will be needed. Cotton prices moved up on the news of U.S.-China tariff reductions. Grain prices remained soft, pressured by strong U.S. crop production prospects and trade restrictions. Cattle prices continued to move up to record highs, supported by solid beef demand and a small U.S. cow herd. High calf prices and strong grazing conditions could lead to herd expansion this year. Contacts noted that the recent Emergency Commodity Assistance Program — which issues one-time economic assistance payments based on planting last year — was a notable infusion of cash to farmers and created some financial relief.”
The San Francisco bank said, “Conditions in agriculture and resource-related sectors weakened slightly. Exports fell for products such as nuts, tree fruit, beef, and logs. As a result, producers turned to domestic markets. While domestic demand was largely stable, it was insufficient to absorb the extra supply, which led to producers receiving lower prices for their products. Additionally, contacts noted a shift in demand away from some higher-priced products, such as organic produce.”
More Like This, Tap A Topic news
