Great Plains Economic Activity Deteriorating Due to COVID-19

KANSAS CITY, MO – After holding fairly steady in the first half of March, Tenth District economic activity deteriorated sharply later in the month as the spread of COVID-19 negatively impacted consumer spending and business activity. Most bankers in the region are expecting additional declines in the months ahead, according to the Federal Reserve’s latest Beige Book report. The Tenth Federal Reserve District includes western Missouri, Nebraska, Kansas, Oklahoma, Wyoming, Colorado & northern New Mexico. Agricultural economic conditions weakened as well in March. Cattle prices declined rapidly in mid-March which reduced profit opportunities for producers. Corn prices also decreased sharply as demand declined alongside a substantial drop in ethanol production. Credit conditions weakened modestly from the prior survey period, and while many farm lenders cited uncertainty about the extent of the impact, most expected conditions to deteriorate further in the coming months.