Mixed Bag For Agriculture in Latest Fed Report

WASHINGTON, DC – Nationally, economic activity continued to increase across all Districts, with the pace of growth characterized as slight to modest in most Districts. Changes in activity varied greatly by sector according to the latest Federal Reserve Beige Book released on Wednesday.

There were reports that improved income prospects had eased stress on agricultural borrowers somewhat, though concerns remained for next year, when government support was expected to drop substantially. The Federal Reserve Bank of Chicago reported economic activity in the Seventh District increased robustly in late August and September, but the pace of growth was slower than the prior reporting period and activity remained well below its pre-pandemic level.

Federal Reserve Bank of Kansas City says Tenth District economic activity expanded slightly in September despite a pullback in consumer spending for the first time since early summer. Apart from soybean and hog prices, agricultural prices generally remained low. Extreme drought in portions of Colorado, Wyoming, New Mexico, Oklahoma and Nebraska could further lower crop revenues and reduce income prospects for cow-calf producers impacted by the severe conditions.

According to the Federal Reserve Bank of Dallas, economic growth resumed in the Eleventh District after a spike in COVID-19 infections over the summer disrupted the budding recovery. Soil moisture conditions deteriorated further across the western part of the district, where drought conditions continued to intensify. Drought hampered pasture conditions in parts of the district, which coupled with increased feed costs strained livestock producers. Contacts expressed concern over the La Niña weather pattern that has developed and is likely to persist through the winter, which will bring drier weather and could hinder crop and pasture conditions.
(SOURCE: All Ag News)