On Wednesday, the Federal Reserve released its October 2021 Beige Book update, a summary of comments on current economic conditions by the Federal Reserve District. The report included several observations regarding the American agricultural economy.
* Sixth District – Atlanta– “Agricultural conditions have remained mixed. Widespread rain kept the district without drought, but left parts of the district in unusually humid to excessively humid conditions.
Producers continued to assess the damage caused by Hurricane Ida; early estimates indicated damage to row crops and vegetables, sugar cane, timber, livestock and infrastructure.
“Year over year, production forecasts for corn, soybeans, peanuts and cotton were up while forecasts for rice and sugarcane were down. The USDA reported that year-over-year prices paid to farmers in August were up for corn, cotton, soybeans, cattle, broilers and eggs, but down for the rice and milk. On a month-to-month basis, prices were up for corn, rice, livestock, broilers and eggs, but down for cotton, soybeans and milk.
* Seventh District – Chicago – “Despite the drought in some regions, But and soybean crops in the District were bigger than expected and near record levels. Following abundant supplies of both crops exerted downward pressure on prices. That said, corn and soybean prices were higher than a year ago. Cattle prices remained stable, while milk prices recovered somewhat. Faced with higher feed costs, the margins of dairy farms have tightened.
Rising energy prices and logistical issues have raised concerns about cost and availability for 2022.
“Farmland prices and rents continued to rise.
Luke Worrell gave an overview of some of the key findings on farmland values from a recent survey of the #Illinois Society of Professional Farm Managers and Rural Appraisers on Thursday’s farmdoc webinar (90 second clip).
– Agricultural policy (@FarmPolicy) September 3, 2021
“Cash from government programs and product sales has been curb demand for agricultural loans.
* Eighth district – St. Louis– “Agricultural conditions have improved slightly since our previous report. Globally crop yields increased slightly from the previous year. The contacts are very optimistic on current conditions in the District. Farmers reported a strong harvest season combined with high prices, which contributed to a solid season overall. Hurricane Ida caused some minor delays but was not a major disruption to agribusiness in the district. However, rising input prices, disruptions to the global supply chain and the lack of manpower necessary for low-skilled and highly skilled agricultural work.
* Ninth District – Minneapolis– “Agricultural conditions in the district have deteriorated somewhat since the previous report. While producers continued to benefit from strong commodity prices, most of the district remained in serious or worse condition Drought state. Wheat yields and production and other small grain crops in the district states for 2021 will be significantly lower than the previous year.
” Most of corn and soybean crops were evaluated in average or bad condition. “
* Tenth District – Kansas City – “Conditions in the agricultural sector of the 10th arrondissement stayed strong. Prices for corn, soybeans and pork have declined slightly since August, but, along with prices for wheat and cotton, stayed at multi-year highs. Contacts reported lingering concerns about rising input costs putting downward pressure on agricultural income In the coming months.
Gary Schnitkey of farmdoc noted in Thursday’s webinar, that even with higher input costs, based on a $ 4.50 (#But) and $ 12.00 (#soy), prices, operator and land yields would still be higher than cash rents until 2022 (clip, 90 seconds). pic.twitter.com/JaRxaXsdYE
– Agricultural policy (@FarmPolicy) October 15, 2021
“Some contacts also noted a willingness to hold larger stocks of inputs over the coming year. Weakness in the cattle industry As concerns about drought and rising input costs intensified. Low cattle prices continued to limit the profit margins of breeders.
* Eleventh District – Dallas – “Soil conditions remained for the most part adequate in Texas, although drought conditions persisted in parts of southern New Mexico. Harvest conditions were quite favorable, increasing the expectations of significantly higher production this year than the last for a variety of crops including cotton, sorghum and maize. Agricultural prices generally declined slightly during the period considered. Pasture conditions were fair to good, and soil moisture conditions promising for the winter wheat plantation increased optimism for crop performance.
* Twelfth District – San Francisco– “Conditions in the agriculture and resource sectors have improved somewhat. Demand for the region’s agricultural products remained strong both at home and abroad. Crop yields on fruit trees, wheat and grapes were inferior due to warmer temperatures and water shortages. Some contacts reported that farmers were abandoning part of their acreage fallow to use water on more profitable crops. As a result, some fruit stocks have been reduced. Several contacts noted price pressures stemming from increased transportation and labor costs. Some growers in the Pacific Northwest pointed out that thelabor shortage led them to hire most of their seasonal workers through the temporary worker visa program rather than locally. Supply chain disruptions and shipping delays continued to weigh on producers with a contact reporting that about 25 percent of orders were not shipped.