January 25, 2020

Federal Reserve Beige Book: Observations on the Ag Economy- September 2013

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– “Heavy rains in the Mid-Atlantic delayed the harvest of some grains and hay cutting, particularly in the lowlands of the Carolinas. According to one source, cotton, peanuts, and soybeans might be damaged by the unusually high levels of precipitation. Another contact in South Carolina noted that some late crops could not be planted and root systems of plants in the ground have not developed well because of the rain. He added that cotton and tobacco crops “do not look good at all.” A number of contacts noted that corn prices had risen and were expected to remain high for some time. Prices of beef and pork were also up, according to sources. Poultry farming and fruit production were strong in recent weeks. Results of our recent agricultural credit survey indicated that farmland values remained relatively constant since the beginning of this year.”

* Sixth District- Atlanta– “Since the last report, most of the District received ample or, in some cases, excessive rain. These rains have resulted in problems with pesticide efficacy, delayed planting, and damage or reduced yield for some crops. On a year-over-year basis, prices paid to farmers were elevated for meat protein (beef, hogs, and broilers), corn for grain and cotton saw price reductions, and soybean prices remained unchanged.”

Seventh District- Chicago– “Dry weather affected crop conditions in much of the District during the reporting period, lowering expectations for crop yields. Soybeans especially needed rain in order to fill out pods. Some of Iowa once again faced drought conditions. Nonetheless, corn and soybean conditions remained much better than they were during the drought last year. There were even parts of the District that received adequate moisture and should have above normal yields. Indeed, corn and soybean prices decreased on both spot and futures markets. There were also reports that less of this year’s harvest than usual was pre-sold. Milk, hog and cattle prices declined from the prior reporting period, with livestock producers benefiting from falling feed costs. District milk production once again outpaced the levels of a year ago.”

Eighth District – St. Louis– “Farmers in the District expect that the corn crop in 2013 will produce, on average, 59 percent more corn than last year. In contrast, the District cotton crop is expected to fall short of 2012 levels both in terms of acres harvested and production. Across the District states, 92 percent of the corn crop was rated in fair or better condition; the sorghum and soybean crops were similarly rated, with 93 percent and 91 percent in fair or better condition, respectively.”

Ninth District- Minneapolis– “Conditions for District agricultural producers improved since the last report. While progress remains slower than average, recent warm and dry weather has helped crops catch up, as the majority of the corn, soybean and spring wheat crops are listed in good or excellent condition in all District states. According to the Minneapolis Fed’s second- quarter (July) survey of agricultural credit conditions, 90 percent of respondents said farm incomes increased or held steady over the previous three months, with similar results for household and capital spending. Despite the wet beginning to the growing season, USDA estimates indicate that acres of corn and soybeans planted in District states saw only a small decline compared with last year. North Dakota wheat acreage fell nearly 1 million acres, or 12 percent, from last year. Prices received by producers increased in July from a year earlier for cattle, hogs, milk, eggs, chicken, hay and potatoes; prices for corn, wheat, dry beans and turkeys fell, while soybean prices were flat.”

Tenth District- Kansas City– “Farm income prospects dimmed since the last survey period as drought persisted and crop prices fell. While yields varied, winter wheat production was below average across the District. In some areas without irrigation, dry weather hindered corn development and weakened plants against disease. Much of the District’s corn crop was considered in fair condition although the soybean crop was still rated in mostly good condition. Crop prices fell in August on higher global production estimates. Even with a drop in feed prices, losses continued for most feedlot operators as cattle prices moved lower. In contrast, a rebound in hog prices returned profits to some hog producers. Demand for farm operating loans strengthened with high input costs and reduced farm income. Despite weaker farm income prospects, farmland values continued to set records, with demand for farmland driven in part by high levels of wealth in the farm sector.”

Eleventh District- Dallas– “Drought conditions continued to affect most of the district, although the severity in several areas was eased by unusually good July rainfall. Farmers began harvesting row crops, and conditions were mostly fair to good. The cotton crop is expected to be smaller than previously anticipated, causing cotton prices to improve slightly. Feeder cattle prices rose over the reporting period because of tight supplies and lower feed costs.”

Twelfth District- San Francisco– “Sales of agricultural items and resource-related production activity expanded in the District. Demand was generally strong for most crop and livestock products. However, relatively light traffic at fast-food restaurants limited sales of some vegetables. In addition, some grain producers expect slightly lower profits due to price declines.”


Farm Bill; Budget; Ag Economy; Smithfield; and, CFTC

Farm Bill

Secretary of Agriculture Tom Vilsack was a guest on yesterday’s AgriTalk radio program with Mike Adams where the discussion focused on the Farm Bill.

A transcript of yesterday’s AgriTalk interview is available here.

Sec. Vilsack explained that, “Everybody in the country knows we’re not going to have a $40 billion cut in SNAP, and a lot of folks believe it’s a bad idea to separate the nutrition programs from the food programs, so we’ve wasted time, and frankly, that’s something we don’t have a lot of. It’s important for the House to get serious about this and get it done.”

“The reality is there are ways to get this program [SNAP] in better shape,” Sec. Vilsack noted, adding that, “The Senate has looked at certain steps that could be taken. I think we could ask states to do a bit more in terms of finding folks who are able-bodied and getting them to work and having less reliance on SNAP without disqualifying millions and millions of people who would otherwise be qualified for the program. I mean, there’s still a lot of hurt out there in the economy in certain segments, and that’s what this program is designed to provide help and assistance for.”