Fed Reserve Beige Book Reveals Improved Agricultural Economy

WASHINGTON, DC – Expectations for farm income in 2021 strengthened across sectors in April and early May according to the latest edition of the Federal Reserve Beige Book. Drought and dry weather conditions were reported by the Chicago District, though timely rains could still erase most of the impact. Despite higher prices, livestock producers’ margins were little improved because of higher feed costs and farmland values increased once again, because of strong demand and limited inventory.

Kansas City Fed reports the Tenth District farm economy remained strong, but drought continued to strain all types of producers in the western part of the region. Alongside severe drought, the wheat crop was in a poorer condition in Colorado relative to other states and the impact of drought on pasture quality and hay production continued to worsen

Dallas Fed says recent rainfall eased drought conditions in parts of the District and improved prospects for crops and overall, row crop farmers were optimistic for improved production and revenues this year. Also, beef exports remain strong, which together with continued capacity constraints in meatpacking plants have driven up beef prices to well-above-average levels.

San Francisco Fed Bank reports continued supply chain disruptions that are negatively affecting many producers with one reporting both domestic and international logistical issues that resulted in significant delays in seafood product sales. Growers in California note that current drought conditions are expected to negatively impact annual crops this year, driving up labor and electricity costs as farmers depend more on wells and water pumps for irrigation.
(SOURCE: All Ag News)