On Wednesday, the Federal Reserve Board released its October 2021 Beige Book Update, a round-up of comments on the Federal Reserve District’s current economic conditions. The report contained several comments on the US agricultural economy.
Diagram of the Fed districts from “The Beige Book”.
* Sixth District – Atlanta – “Agricultural conditions have remained mixed. Widespread rain held the district in place free from drought, but left parts of the district in unusually damp to excessively wet conditions.
Manufacturers continued to rate damage from Hurricane Ida; First estimates showed damage to row crops and vegetable crops, sugar cane, wood, livestock and infrastructure.
“Year-over-year, production forecasts for corn, soybeans, peanuts and cotton were up, while forecasts for rice and sugar cane were down. The USDA reported that prices paid to farmers in August rose year-over-year for corn, cotton, soybeans, cattle, broilers and eggs, while they fell for rice and milk. In a month-on-month comparison, prices rose for corn, rice, cattle, broilers and eggs, but for cotton, soybeans and milk. “
* Seventh District – Chicago – “Despite the drought in some areas Corn and Soybean harvests in the district became greater than expected and near record highs. More plenty of supplies both harvests depressed prices. However, corn and soybean prices were higher than a year ago. Cattle prices remained unchanged while milk prices recovered somewhat. Given higher feed costs, Margins tightened for dairy farms.
Rising energy prices and logistical issues raised concerns about costs and availability for 2022.
“Farmland prices and rents continued to rise.
Luke Worrell, during Thursday’s farmdoc webinar, reviewed some of the key findings on the value of farmland from a recent survey by the #Illinois Society of Professional Farm Managers and Rural Appraisers (90-second clip).
* Arable land values in #Illinois: ⬆️20%. pic.twitter.com/rMTFNhZeUu
– Farm Policy (@FarmPolicy) September 3, 2021
“Was cash from government programs and product sales Hold back demand for agricultural loans. “
* Eighth District – St. Louis – “Agricultural conditions have improved slightly since our last report. total Crop yields have increased moderately compared to the previous year. Contacts are very optimistic about the current conditions in the district. Farmers report a strong harvest season coupled with high prices which have contributed to this a strong season overall. Hurricane Ida caused some minor delays but was not a major disruption to the district’s agribusiness. However, there are concerns about rising input prices, disruptions in the global supply chain and the Lack of manpower necessary for both low-skilled and high-skilled agricultural work. “
* Ninth District – Minneapolis – “Agricultural conditions in the districts have deteriorated somewhat since the last report. While producers continued to benefit from solid commodity prices, most of the district remained in a dire or worse situation dryness State. Wheat yields and production and other small grain crops in the district states for 2021 much lower than last year.
Briefing of the agricultural statistics committee. Small Grains and Stocks, USDA – National Agricultural Statistics Service (September 2021).
“Most of the district Corn and soybeans were rated in fair or bad condition. “
* Tenth District – Kansas City – “Tenth District Agricultural Sector Conditions” stayed strong. Corn, soybean and pork prices have fallen slightly since August, but together with wheat and cotton prices persisted at a multi-year high. Contacts reported persistent concerns about increasing input costs for putting Downward pressure on farm incomes in the following months.
Farmdoc’s Gary Schnitkey stated in Thursday’s webinar that even with higher input costs, based on prices of $ 4.50 (#corn) and $ 12.00 (#soybeans), operator and land yields are still above cash through 2022 would lie (clip, 90 seconds). . pic.twitter.com/JaRxaXsdYE
– Farm Policy (@FarmPolicy) October 15, 2021
“Some contacts also noticed the desire to hold on larger stocks of inputs in the coming year. Weakness in Cattle industry persisted as concerns about drought and higher input costs increased. Low cattle prices continues to limit the profit margins for ranchers. “
* Eleventh Ward – Dallas – “Texas soil conditions remained largely reasonable, although drought conditions persisted in parts of southern New Mexico. The growing conditions were quite favorable, expectations of much higher production last this year on a variety of crops including cotton, sorghum and corn. Agricultural prices generally fell slightly over the period. The grazing conditions were moderate to good and promising soil moisture conditions for the Sowing winter wheat increased optimism for the harvest performance. “
* Twelfth District – San Francisco – “Conditions in the agriculture and raw materials sectors have improved somewhat. Demand for agricultural products in the regions remained robust at home and abroad. Crop yields were on tree fruits, wheat and grapes lower due to warmer temperatures and a lack of water. Some contacts reported that farmers had abandoned part of their acreage fallow Use water for higher yielding crops. As a result, some fruit stocks have been reduced. Several contacts noted price pressures due to increased transport and labor costs. Some producers in the Pacific Northwest emphasized that lAbortion scarcity prompted them to hire most of their seasonal workers through the temporary work visa program rather than locally. Supply chain interruptions and delivery delays continued to burden the producers with a contact who reported that about 25 percent of the orders were not dispatched. “