Agriculture remains one of the strong parts of the economy in the eyes of the Federal Reserve.
For the past two months, Fed economists have generally given agriculture high marks across its districts.
“Strong crop yields were reported, while in general, agricultural commodity prices fell and drought conditions stabilized or improved. Richmond, Chicago, and Kansas City reported strong crop yields for fall harvests. Contacts in the Kansas City District noted decreases in farm incomes and increases in the demand for farm operating loans, as prices softened in response to rising yields. The Chicago, Kansas City, Dallas, and San Francisco Districts indicated strong demand and increased profitability in livestock due to lower feed costs. Atlanta contacts reported making investments in various types of agricultural equipment as a means to further improve production and contain costs. Prices paid to farmers for wheat, corn, and soybeans fell in Atlanta, Chicago, and Minneapolis. However, in Chicago, higher exports cushioned the decline. The Kansas City District indicated rising farmland values, although the rate of increase slowed.”
That is the summary of the Fed’s latest Beige Book, but what does the rest of it say?
The Beige Book is prepared by Federal Reserve economists across the twelve Fed districts and the primary focus on agriculture is in the Cornbelt and regions that have substantial crop and livestock production activity.
SEVENTH DISTRICT – CHICAGO
Harvesting took longer this fall than a year ago given the larger size of the crop and delays from precipitation. Crop yields remained higher than expected across the District, even in areas that experienced yield losses from drought. In general, farmers tended to sell soybeans and store corn. Pastures and winter wheat fields were in better shape than they were last year. Crop prices fell over the reporting period, though higher exports of corn, soybeans, and wheat cushioned the decline. Lower fertilizer prices relieved some concerns about 2014 crop production costs. Milk and cattle prices were a bit higher; hog prices fell, although they remained above the level of a year ago. The prospects for livestock producers improved due to reduced feed costs.
EIGHTH DISTRICT – ST. LOUIS
As of mid-November, over 90 percent of the District corn, sorghum, and rice crops had been harvested, while harvest progress of the District cotton and soybean crops was 81 and 89 percent complete, respectively. Winter wheat planting was 87 percent complete, on average, across the District.