The Federal Reserve Board released its mid-year snapshot July 17 of agriculture and other economic indicators across the nation’s districts.
The Federal Reserve System’s Beige Book reflects the conditions from mid-May through June based on information provided by economists, market experts, bankers and other sources.
“The outlook for agriculture income dimmed some over the reporting period as prices for most commodities fell. Crop farmers reported that in general, field conditions were excellent and better than last year,” according to the Seventh Federal Reserve District of Chicago report, which includes the northern two-thirds of Illinois and Indiana and all of Iowa, Wisconsin and Michigan.
“Both corn and soybean prices fell, reducing expected profits from the upcoming harvest. Livestock farmers continued to struggle overall, with some reports of asset sales by hog producers and closures of dairy operations.
“Contacts throughout the district expressed heightened concerns about the impact of trade disputes and tariffs on the agricultural industry.”
The Eighth Federal Reserve District of St. Louis includes the southern parts of Illinois and Indiana and eastern half of Missouri, as well as parts of Tennessee, Arkansas, Kentucky and Mississippi, reported district agricultural conditions weakened slightly from the previous reporting period, but improved slightly from the same time last year.
“The percentages of corn, cotton and rice rated fair or better in June declined slightly relative to the prior month, while that of soybeans increased modestly,” the report stated.
“However, both the corn and soybeans percentages were higher than a year ago, the cotton percentage was little changed and the rice percentage was down slightly. Estimated soybean acreage saw a substantial upward adjustment in Illinois relative to March planting intentions, but was revised downward in Missouri.”
The Federal Reserve Bank of Minneapolis report district agricultural conditions were stable relative to the previous report. The district includes all of Minnesota, the Dakotas and Montana, northwestern Wisconsin and all of Michigan’sUpper Peninsula.
“Despite a late start to the planting season, crop progress in the Minneapolis district states as of late June was generally in line with five-year averages, and the majority of crops were rated in good or excellent condition. However, some areas of the Dakotas and Montana were experiencing dry or moderate drought conditions.”
The Tenth Federal Reserve District of Kansas, which includes the western part of Missouri, Kansas, Nebraska, Oklahoma, Wyoming, Colorado and the north part of New Mexico, said the farm economy weakened slightly and drought persisted in some areas.
“Trade uncertainty and expectations of larger supplies in 2018 put downward pressure on crop prices. Corn prices were slightly lower than a year ago following a sharp decline in June, while soybean prices declined even more rapidly and reached an eight year low,” it said.
“Although prices for wheat remained steady and slightly higher than a year ago, revenues in Kansas and Oklahoma could remain strained as nearly half of winter wheat acreage was rated as poor or very poor due to dry conditions.
“Livestock prices were slightly lower than one year ago following modest declines in June. Hog prices, which continued to be supported by expectations of increased U.S. exports and relatively strong global demand, increased slightly in June, but remained slightly below levels from one year ago.”
Economic activity continued to expand across the United States, with 10 of the 12 Federal Reserve Districts reporting moderate or modest growth. The outliers were the Dallas District, which reported strong growth driven in part by the energy sector, and the St. Louis District, where growth was described as slight.
Manufacturers in all districts expressed concern about tariffs and in many districts reported higher prices and supply disruptions that they attributed to the new trade policies. All districts reported that labor markets were tight, and many said that the inability to find workers con-strained growth.
This article provided by NewsEdge.