Thursday, September 13, 2018

Beige Book examines the agricultural economy by Federal Reserve Bank districts; tariffs and trade having impacts

Federal Reserve districts (Federal Reserve Board map)
On Sept. 12 the Federal Reserve Board released its August 2018 Beige Book update, which summarizes commentary on current economic conditions by Federal Reserve district, Keith Good reports for Farm Policy News at the University of Illinois. A few notable entries:
  • Most of the Sixth District, which is based in Atlanta and covers much of the Deep South, remains drought-free, but most of Louisiana and parts of Mississippi and Alabama are abnormally dry. Production for rice, soybeans and cotton is up from last year, but peanut production is down. Year-to-year rices paid to farmers in June were down for beef but up for corn, cotton, rice, soybeans, broilers and eggs. 
  • Overall crop yields for the Seventh District, centered on Chicago, are set to hit a record high because of good weather. Wheat prices were higher because of lower world supplies, and hog prices were lower because tariffs led to a drop in exports. Dairy farmers were still struggling as milk prices remained low. 
  • In the Tenth District, which includes the heart of the Great Plains, farm income and credit conditions weakened and crop prices remained fairly steady after sharp declines in June and July. Corn and soybean prices increased a little in late July but went down again in August. "Uncertainty surrounding trade was a primary concern, and the prolonged weaknesses in the agricultural economy were increasingly impacting farm borrower finances. Although interest rates on farm loans continued to increase along- side weakening agricultural credit conditions, farmland values declined only modestly," Good reports.

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