The agriculture sector saw slight contraction. In the Minneapolis Fed’s third quarter (October) survey of agricultural credit conditions, 28 percent of lenders reported that farm incomes decreased from the second quarter, while 15 percent reported increases; nearly half expect incomes to decrease in the final three months of 2013. October prices received by farmers decreased from a year earlier for wheat, corn, soybeans, milk, eggs, turkeys and cattle; prices increased for chickens, calves, hogs and dry beans. An early-October blizzard in western South Dakota killed an estimated 15,000 cattle there. Drought conditions abated in most of the District in late fall.
TENTH DISTRICT – KANSAS CITY
A steep drop in crop prices, which partly reflected better-than-expected corn and soybean yields, lowered District farm income and boosted demand for farm operating loans since the last survey period. Some livestock operators in Western Nebraska also faced significant herd losses due to a severe October snowstorm. Farm income was expected to remain weaker than last year despite some support from crop insurance and a gradual improvement in livestock sector profitability resulting from lower feed costs. With reduced incomes, agricultural bankers reported the number of requests for loan renewals and extensions edged up and demand for new farm operating loans also increased. Farmland values rose further, but the pace of gains moderated and most contacts expected values would hold steady through the end of the year.
ELEVENTH DISTRICT – DALLAS
Drought conditions continued to ease, although the Texas panhandle area remained particularly dry. Corn and sorghum production was higher, while cotton production was down. The livestock sector continued to benefit from improved pasture conditions, lower feed costs, and high selling prices for cattle.
Recovery from the drought in most locations allowed improved crop production across the agriculturally-based Federal Reserve Districts in 2013. While some areas were challenged from weather conditions, the majority of production returned to normal and above normal levels. Prices of commodities responded at lower levels, creating better economic conditions for end users, including exporters. Due to lower outlooks for grain prices, land values have softened and slowed their rate of upward movement. Farm income and farm debt conditions are being monitored.