The Federal Reserve watching agriculture closely
Eighth District at St. Louis
“At the end of June, the condition of over 90 percent of the cotton, corn, soybeans, sorghum, and rice crops was rated as fair or better in all the District states. Furthermore, at least 70 percent of total pastureland across the District states was rated in good or excellent condition. The winter wheat harvest was behind its 5-year average and behind the progress made by the same time last year.”
Ninth District at Minneapolis
“The agricultural sector weakened since the last report. District farmers made progress after a late spring, but remain behind the five-year average for corn and soybean plantings due to recent heavy rains. In some areas, farmers are expected to switch from corn to soybeans due to the weather. Prices increased from a year earlier for wheat, corn, soybeans, chickens, milk, hogs, cattle and eggs; prices fell for turkeys and dry beans. The late plantings, along with concerns about warmer and drier weather later this summer, caused the USDA to increase its corn price forecast slightly, though prices are still expected to decrease from current levels.”
Tenth District at Kansas City
“Agricultural production expectations improved somewhat with recent rains, but varied regionally. Summer storms eased dry conditions in eastern parts of the District, though drought persisted in western regions. The winter wheat harvest was underway or complete in Oklahoma and Kansas with highly variable yields depending on the extent of drought and freeze damage. Despite expectations of a poor wheat harvest in some areas, wheat prices fell since the last survey period. The corn and soybean crops, however, were rated in mostly good or better condition with the improved soil moisture. Although corn and soybean prices remained historically high, improved growing conditions led to a drop in expected harvest prices for both crops. Feedlot operators struggled with high input costs and falling cattle prices, but losses narrowed for hog producers after a rebound in hog prices. Cropland values moved higher but were expected to hold steady during the growing season.”
The regional Federal Reserve Bank economists all reported that delayed planting has created some crop production uncertainty, and highly variable weather has challenged crops further with excess heat and excess moisture. The economists also noted that crop prices and other commodity prices have fallen from the highs of 2012. While crop production was shaping up to be better than last year, livestock production would benefit from lower feed prices. Very little was said about land prices or other measures of the farm economy.
Source: FarmGate blog
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