The Federal Reserve’s Beige Book last week said total direct payments to farmers was expected to increase this year.
Subsequent to the Beige Book’s release, the Bank released a summary of agricultural conditions by district. This is a version of that release, edited for length and style.
SIXTH DISTRICT – ATLANTA
Much of the district was drought free although parts of Alabama, Georgia, the Florida Panhandle and Tennessee experienced abnormally dry to moderate drought conditions.
Some Louisiana producers reported crop damage from Hurricane Barry. Average farm real estate values rose from 2018 except for Georgia, where values declined.
Prices paid to farmers in June were up for corn and beef but down for cotton, rice, soybeans broilers and eggs.
SEVENTH DISTRICT – CHICAGO
Expectations for corn and soybean output improved but remained much lower than a year ago. Crop development was as much as a month behind normal. Prices for corn and soybeans declined.
Hog and cattle prices moved lower. Another round of payments from the Market Facilitation Program, along with other government programs, were helping to make up for low farm incomes.
EIGHTH DISTRICT – ST. LOUIS
Agriculture conditions were down modestly. Compared with mid-July, the percentages of cotton and rice rated fair or better declined modestly, while those for corn and soybeans declined slightly.
Relative to last year, the percentage of all four crops rated fair or better declined moderately. Farming conditions remained strained because of low commodity prices and lingering effects from the unusually wet weather and flooding in the spring. Government assistance was expected to provide some short-term help.
NINTH DISTRICT – MINNEAPOLIS
Agricultural conditions remained weak. USDA estimates lowered the planted acreage and expected production for corn, soybeans and spring wheat from last year, partly because of heavy rains and flooding.
Income and capital spending decreased from last year, with further declines expected. However, some expressed optimism about a rally in commodity prices.
TENTH DISTRICT – KANSAS CITY
The farm economy remained weak, and commodity prices declined in response to supply expectations and trade uncertainty.
Contacts reported weak farm income but expected slower deterioration in coming months.
Less pessimistic expectations were supported by increases in crop prices earlier in the year, but sharp declines in crop and livestock prices in August weighed on revenues.
Hog and soybean prices declined moderately alongside ongoing trade disputes, and cattle prices decreased sharply following a fire at a beef processing facility. Corn and wheat prices also declined sharply following higher-than-anticipated production estimates.
ELEVENTH DISTRICT – DALLAS
Higher temperatures and a lack of rainfall brought drought conditions into parts of the district.
Dryland grains were well established before weather conditions deteriorated, so solid yields were expected. Irrigated crops planted later in the growing season were showing more weather effects.
CATTLE, BEEF RECAP
Limited cash cattle trade was reported in the Corn Belt Tuesday at $101 to $102 per cwt, up $1 from last week.
Cash cattle trade last week ranged mostly from $99 to $100 per cwt on a live basis with some at $101 late in Nebraska, down $1 to $2 from the previous week, and at $159 to $162 on a dressed basis, down $1 to $5.
The USDA choice cutout Wednesday was down $1.53 per cwt at $218.24, while select was down $1.94 at $191.97. The choice/select spread widened to $26.27 from $25.86 with 126 loads of fabricated product sold into the spot market.
The CME Feeder Cattle index for the seven days ended Tuesday was $137.33 per cwt, up $0.21 from the previous day. This compares with Wednesday’s Sep contract settlement of $139.87, up $0.70.