CHICAGO — Overall economic activity in the Midwestern Federal Reserve Districts began to slow early last month as COVID-19 cases surged while the agricultural outlook improved.
The observations were reported in the Federal Reserve’s Beige Book, a summary of the nation’s current economic conditions based on information collected on or before Nov. 20.
The report, released Dec. 2, summarizes comments received from bank directors, businesses, community contacts, economists, market experts and other sources.
Here’s what the survey said about the agricultural climate across the Corn Belt.
“Farm income beat expectations for the growing season, as prices for key agricultural commodities moved higher and government support continued. Corn, soybean and wheat prices were up again, reflecting tighter stocks and increased exports,” it was reported by the Seventh Federal Reserve District of Chicago.
The district saw above-trend corn and soybean yields. Most specialty crops had solid yields, as well. Favorable weather conditions allowed farmers to complete field work that had been skipped in prior years because of poor weather.
“Dairy prices were mixed, but up on net. Hog and cattle producers also benefited from higher overall prices, but expressed concern about rising feed costs,” the summary for the Chicago district noted.
The district includes the northern two-thirds of Illinois and Indiana and all of Iowa, Wisconsin and Michigan.
St. Louis
Agricultural condition optimism continued in the Eighth Federal Reserve District of St. Louis survey.
“Production levels for corn, rice and soybeans are expected to be significantly higher than in 2019, while cotton production is expected to see a moderate decline. District contacts expressed optimism, citing higher-than-expected yields due to excellent weather conditions and a strong rebound in prices,” the St. Louis district reported.
The district includes the southern parts of Illinois and Indiana and eastern half of Missouri, as well as parts of Tennessee, Arkansas, Kentucky and Mississippi.
Minneapolis
The agricultural outlook in the Federal Reserve District of Minneapolis remained positive.
“Agricultural conditions improved slightly due to solid harvests, recent increases in prices for some commodities and federal relief aid. Respondents to the Minneapolis Fed’s third quarter survey of agricultural credit conditions mostly reported unchanged farm income compared with a year earlier, while the outlook for the fourth quarter was for increasing farm incomes,” according to the survey summary.
The Minneapolis-based district includes all of Minnesota, the Dakotas and Montana, northwestern Wisconsin and all of Michigan’s Upper Peninsula.
Kansas City
The Federal Reserve District of Kansas City also saw moderate improvements in the farm economy due to increased commodity prices.
“Since early October, strengthening demand and downward revisions to production estimates led to sharp increases in corn and soybean prices and moderate increases in most other agricultural prices. Stronger profit opportunities than earlier in the year, in addition to substantial government payments to producers, supported farm sector finances. Although farm income generally remained low in aggregate, contacts reported lower rates of problem loans compared to a year ago,” according to the Kansas City district.
“District contacts continued to express concerns, however, about the potential for renewed pressure in the months ahead, depending on the path of agricultural commodity prices, government sup-port programs and drought in some parts of the region.”
The Kansas City district includes the western part of Missouri, Kansas, Nebraska, Oklahoma, Wyoming, Colorado and the northern New Mexico.
