Observations on the Ag Economy – May 2023 – AgFax

On Wednesday, the Federal Reserve Board issued May 2023 Beige Book The update is a summary of the Federal Reserve District’s commentary on current economic conditions. The report included several observations in this regard American Agricultural Economics.

* Sixth District – Atlanta- „Agricultural conditions have softened since the previous report. Due to the reduced demand for cotton, many farmers are planting less cotton than last year. The demand for livestock was high. Poultry producers continue to struggle as restrictions on exports resulting from bird flu concerns have led to oversupply domestically.. Domestic demand for eggs was high. Milk consumption has decreased. Demand for citrus remained strong amid low production.

* Seventh District – Chicago – „Expectations for the Seventh District’s farm income in 2023 have fallen due to lower prices for key commodities.

Corn and soybean prices fell as faster fieldwork and planting progress raised expectations for a bigger harvest. Soft red wheat prices were weak, but hard wheat prices rose due to drought that has affected much of the US wheat crop and uncertainty surrounding another extension of an agreement to allow exports from Ukraine.

„Eggs and dairy products, especially cheese, had lower prices. Pork prices rose from lows and cattle prices rose. In light of high interest rates, contacts expect farmers to conserve working capital to reduce the need to take out farm operating loans..

„There are reports of slow farm machinery sales and shortages of certain types of equipment. The price of agricultural land rose again Because the demand was firm and the inventory of farms for sale was low.”

* Eighth District— St. Louis– “Overall conditions remain unchanged, but the outlook has weakened slightly since our previous report. Most of the farm contacts surveyed have increased their costs, including labour, which contributed little Poor vision. The percentage of row crops planted increased as expected from the previous reporting period and is slightly higher than this time in 2022. Improvement in planted acres across the county: Some states, such as Missouri and Illinois, have improved more strongly than in the past. year, and the other District States are materially slightly worse off.

* Ninth District – Minneapolis– “Agricultural conditions in the district remained firm during the planting season. About half of the respondents to the survey on agricultural credit conditions reported that farm income increased in the first quarter over the previous year.

Lenders noted improvements in liquidity and the financial position of manufacturers, but they were concerned about commodity price volatility and interest rates.

„Heavy winter snowfall and persistently cold weather will significantly delay spring planting in some areas, contacts suggest.”

* Tenth District – Kansas City– “Conditions in the Tenth District agricultural economy were strong in early May But showed signs of moderating. Corn and soybean prices were slightly lower from April and was modestly lower than a year ago. Prices have recently declined on reports of better planting conditions in most states and elsewhere Early projections suggest production could reach record levels Due to historically strong yields. Wheat prices have increased slightly since April Poor yields due to drought can reduce revenue, especially in Kansas and Oklahoma. Profits among livestock producers continue to be pressured by high feed costs and drought, which has damaged pastures across the region.

* Eleventh District- Dallas- “Drought conditions have improved in the eastern part of the district due to recent rains, while severe drought has persisted in the western part. Grain prices generally declined during the reporting periodOne in the middle A positive outlook for US crop production this year. Drought will hamper crop production in TexasHowever, in particular, contacts expect a below-average cotton crop this year. A bright spot for agricultural producers is on the livestock side Cattle prices have risen significantly over the past six weeks And prices are significantly higher than last year, supported by tight supply and solid demand for beef.

* Twelfth District – San Francisco– “Conditions in the agriculture and resource-based sectors weakened slightly. Reports on exports were mixed as sea freight costs eased somewhat. The war in Ukraine contributed to continued shipping disruptions. Contacts in California noted that wet weather reduced brassica and berry yields. The rain disrupted pollination of tree and vine crops, which is expected to reduce yields. Seafood stocks in the Pacific Northwest are reported to be stable. Correlations are specific to transportation and irrigation water and lower costs High costs for other inputs such as packaging, fertilizer and energy.”