January 24, 2020

Federal Reserve Beige Book: Observations on the Ag Economy- October 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– “Fruit and peanut yields have been excellent, while cucumber production was reduced this autumn as a result of too much rain. Cotton and soybean harvests are also expected to be low this year because of the excessive rain this summer.”

* Sixth District- Atlanta–  “As a result of this year’s excessive rain and flooding, which heavily damaged some crops, the USDA declared most counties in Alabama and many in Georgia, Florida, and Tennessee as natural disaster areas. Since the last report, average monthly prices paid to farmers for corn, cotton, soybeans, hogs, and broilers were down but were up for rice, citrus, beef, and milk. Lower corn prices benefitted livestock producers that rely on corn for feed. Compared to August, cotton estimates for September indicated reduced production in Florida, Mississippi, and Tennessee; higher production in Alabama and Louisiana; and unchanged production in Georgia.”

Seventh District- Chicago– “Although this year’s drought affected the harvest, corn and soybean yields in parts of the District were higher than expected in September. In fact, a contact reported that the local harvest would be the best in four years. Soybean yields were more variable than and not as favorable as corn yields. In the areas affected by drought, subsoil moisture and genetic advances in seeds reduced yield losses. Rains in September slowed harvesting, even damaging some crops that were mature. Crops harvested and sold early brought a premium due to low crop stocks prior to harvest. Since then, corn prices have dropped relatively more than soybean prices. With much of the harvest still unsold, farmers will store more of the crop in the hope of better selling opportunities over the winter. Milk and cattle prices increased from the previous reporting period, while hog prices decreased. Livestock producers continued to benefit from lower feed costs. Fruit crops bounced back strongly from last year’s devastating freeze, leading to lower prices.”

Eighth District – St. Louis– “Crop conditions across the District remained relatively unchanged from our previous report. On average, 89 percent of the District states’ corn, cotton, sorghum, and soybean crops were rated in fair or better condition. Similarly, about 80 percent of the District states’ pastureland was rated in fair or better condition. Harvest progress in the District lagged behind the 5-year average for all five major crops. The District corn, cotton, and rice harvests were 19 percent, 14 percent, and 18 percent behind their five-year averages, respectively. The District sorghum and soybean crops fared slightly better at 9 percent and 8 percent behind their five-year averages, respectively.”

Ninth District- Minneapolis– “Agricultural conditions deteriorated somewhat since the last report. Drought conditions returned to the eastern part of the District in late summer, with parts of eastern North Dakota and central Minnesota seeing severe drought conditions in early September. Crop progress remains behind average due to late spring planting, and yields are likely to be affected. While much of the District corn and soybean crops remain in good or excellent condition, overall quality has fallen in recent weeks. However, in Minnesota, apple growers are expecting a strong harvest. Prices received by farmers in September increased from a year earlier for hogs, cattle, milk, dry beans and chickens; prices for corn, wheat, soybeans, hay, eggs and turkeys fell from a year earlier.”

Tenth District- Kansas City– “In the agriculture sector, crop production expectations were little changed from the previous survey period, but falling prices lowered farm income expectations. With most of the corn and soybean crops still in relatively good condition, overall District yields were expected to be about average. As harvest began, however, a greater probability of near-record corn and soybean production nationally led to a drop in prices, cutting farm income expectations. Meanwhile, heavy rainfall in Colorado and flooding along the South Platte River affected some agricultural lowlands. Scattered storms slowed harvest activity and winter wheat planting, but helped soil moisture conditions. Lower feed prices narrowed losses for cattle feedlot operators and improved profitability for hog producers. Weaker farm income prospects were expected to curtail farm household and capital spending, but demand for quality farmland remained strong.”

Eleventh District- Dallas– “The District remained largely in drought, although the severity lessened in late September in Texas due to good rainfall and the excessive heat tapering off. The harvest progressed normally for row crops, and conditions were mostly fair to good. Improved moisture conditions increased optimism for the winter wheat crop. Beef exports increased over the reporting period.”

Twelfth District- San Francisco– “Agricultural and resource-related sales and production activity expanded in the District. Demand remained strong for most crop and livestock products. Contacts noted that competition for grapes in the California wine industry contributed to higher prices for grapes, which passed through to raisin prices, reducing sales and increasing inventories of raisins.”


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