Observations on the Ag Economy from the Federal Reserve

On March 6, the Federal Reserve released its most recent Beige Book. The Beige Book is a compilation of comments from each of the Federal Reserve districts. The comments reflect on the economic conditions broadly as well as those in the ag sector. Below are some of the ag sector comments.

The Atlanta Federal Reserve district remarks “ag conditions mixed across the district.” Very little of the district is abnormally dry. Orange production is expected to be above last year. Cotton and rice prices have declined and both are important southern US crops. Cash prices for corn, soybeans, beef and broilers are up since November.

The Chicago Federal Reserve district says that contacts across the district report lower wheat and soybean prices. Farm incomes are expected to be lower in 2019 than 2018, anticipating lower crop yields and prices compared to 2019.

The Kansas City Federal Reserve, including Nebraska, commented that farm income declined slightly while farmland prices remained steady. Crop and livestock prices have risen slightly and could improve farm income across the district. The Beige book contains comments prior to the weather disaster of last week in Nebraska. Iowa had significant damage too, but is in the Chicago district.

The Kansas City Fed district reported higher interest rates. They also reported that farmland values are expected to decline but that demand remains high. Farmland sales volumes have increased in the district mostly in Kansas and Nebraska.

The Minneapolis Federal Reserve district reported much the same as others. One comment included concerns about trade tensions and struggles with low commodity prices.