January 19, 2020

Federal Reserve Beige Book: Observations on the Ag Economy

Today the Federal Reserve Board released its Summary of Commentary on Current Economic Conditions.  Commonly referred to as the “Beige Book,” the report included the following observations with respect to the U.S. agricultural economy:

Fifth District- Richmond: “Rainfall across the District supplied much-needed moisture to emerging field crops. In South Carolina, cotton planting was slightly ahead of schedule, and planting of peanuts was well ahead of its normal pace. However, rainfall delayed plantings of cotton and peanuts in parts of North Carolina and Virginia. Excess precipitation was also problematic for strawberry farmers in Virginia, causing fruit spoilage; the problem was compounded by a lack of pickers. Corn and soybeans began to emerge in Maryland, while farmers in West Virginia reported that warm weather put planting of corn and soybeans ahead of schedule. Lastly, the peach harvest was under way in South Carolina, and cantaloupe and watermelon planting was complete.”

Sixth District- Atlanta: “Drought conditions worsened in most of Florida and Georgia and parts of Alabama. Prices paid to farmers for oranges were up and a contact reported these higher prices were dampening demand. Prices paid for soybeans were up on a year-over-year and month-over-month basis because of strong global demand and decreased supplies coming from South America.”

Seventh District- Chicago: “District corn and soybean planting in April and May were well ahead of last year’s pace, as well as the five-year average. Corn planting was almost finished in Illinois, Indiana, and Iowa. The emergence of corn and soybean plants generally was also faster than typical. With an early and promising start, the corn crop may set a record this year, although dryness currently exists across much of the District. Corn and soybean prices fell during the reporting period, while wheat prices rose. Milk prices decreased, and prices are low enough to trigger some concerns about margins for dairy operations. Hog and cattle prices were higher.”

Eighth District- St. Louis: “Crop moisture levels from April to mid-May were classified as slightly dry to favorably moist in most of the District except southern Arkansas and most of Mississippi. Rates of completion for the planting of corn, cotton, rice, sorghum, and soybeans were at least 15 percentage points higher than their 5-year average rates in most District states, while crop emergence was also ahead of schedule. More than 88 percent of the winter wheat crop was rated as fair or better, while 77 percent or more of pasture land was also similarly rated in all District states.”

Ninth District- Minneapolis: “The agricultural sector maintained its strength. Warm spring weather allowed farmers to get into fields early and plantings of corn, spring wheat and soybeans in mid-May was well ahead of average in District states. In addition, recent rains alleviated drought conditions that had persisted until recently in Minnesota and the Dakotas. The Minneapolis Fed’s first quarter (April) survey of agricultural credit conditions indicated that most lenders saw continued increases in farm household income and capital spending, though respondents expect growth to moderate over the next three months. Agricultural output prices have come down somewhat recently. April prices received by farmers for soybeans, cattle and chickens increased from a year earlier; prices declined for wheat, corn, hogs, dairy products and eggs.”

Tenth District- Kansas City: “Agricultural conditions improved since the last survey. District contacts reported that winter wheat development was roughly three weeks ahead of normal. Most of the winter wheat was rated in fair-to-good condition. Spring planting was nearly complete, and early emerged crops were rated in good condition. Tight crop supplies kept cash prices high, while the prospects of a bumper 2012 crop weighed on futures prices. High feeder calf prices continued to support strong profits for ranchers. In contrast, profits at cattle feedlots were strained by high feed and feeder calf costs. Strong export demand underpinned profits for pork producers. Farmland values rose further, buoyed by farm incomes and revenues from mineral rights leases.”

Eleventh District- Dallas: “Drought conditions improved over the reporting period, particularly in West Texas thanks to recent rains. Better soil moisture continued to improve prospects for the 2012 crop year, and pastures greened up for livestock producers. The wheat harvest began and yields so far were above average.”

Twelfth District- San Francisco: “Demand for agricultural products remained robust, while extraction activity for energy resources continued to be uneven. Orders and sales expanded further for most crop and livestock products, spurred in part by strong growth in overseas exports. However, contacts noted that the costs of energy inputs remained quite high, and they cited renewed concerns that drought in some areas may undermine growing conditions in coming months.”


Farm Bill Issues; Animal Agriculture; Appropriations; Budget; and, Trade

Categories: Audio /Budget /Farm Bill /Trade

Farm Bill and Policy Issues

The Associated Press reported yesterday that, “The Senate began consideration Tuesday of a farm and food bill that would bring fundamental changes to how the government protects food growers during hard times, including putting an end to paying farmers regardless of whether they plant a crop.

“The Senate is expected to spend several weeks on the five-year bill as lawmakers thrash out differences between Northern and Southern farmers over safety net programs and address the costs of the federal food stamp program, which makes up about 80 percent of the $100 billion in annual spending under the legislation.”

The AP article noted that, “Senate Agriculture Committee chairman Debbie Stabenow, D-Mich., who crafted the bill with the panel’s ranking Republican Pat Roberts of Kansas, said it represented ‘the most significant reform in agriculture policy in decades.’”