Corn Belt Farmers Struggle with Low Prices and Tight Credit

The latest Beige Book from the Federal Reserve shows that agricultural conditions in the Corn Belt are still struggling due to lower commodity prices and tighter credit.

In the Chicago District, farm income weakened in late May and June as crop prices fell. Corn, soybeans, and wheat all moved lower, while egg and hog prices were mostly unchanged and cattle prices slipped from elevated levels. Dairy prices were down on balance, even as contacts said cheese production increased with stronger demand for whey protein.

In the St. Louis District, agriculture conditions were largely unchanged from the previous Beige Book, but a rural lender in northwest Arkansas reported drought and reductions in federal funding sharply reduced productivity and revenue. An agribusiness contact was pessimistic about row-crop farming, especially rice, and said some farmers are unsure whether they can keep operating.