Rural America: Perspective from USDA Report, and Federal Reserve Ag Credit Survey

On Thursday, the U.S. Department of Agriculture released its annual Rural America at a Glance report, which summarizes the status of conditions and trends in rural areas. In addition, the Federal Reserve Bank of Minneapolis recently provided details of its third quarter Agricultural Credit Conditions Survey, which follows on the heels of recent third quarter agricultural reports from four other federal reserve districts. Together, the USDA report and Minneapolis Fed update, provide some interesting perspective on the state of non-metro America.
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Federal Reserve Bank of Minneapolis: Impacts of Summer Drought in the Plains

An update last week from the Federal Reserve Bank of Minneapolis ("The worst they've ever seen," by Ashwini Sankar) explored some of the lingering impacts of this summer's severe drought in Montana and the Dakotas. The article noted that, "Recent heavy rains have brought relief to drought-stricken parts of the Ninth District, but months of dryness have exacted a heavy toll on crops, cattle herds and natural resources that is likely to weigh upon regional and local economies for months to come."
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Crop Choices, Farm Size: Changes in a Time of Low Corn and Soybean Prices

Recent news articles have documented that lower crop prices for commodities such as corn and soybeans have caused some producers to make changes to their traditional crop rotation, or to consider organic crop production methods.  More broadly, a recent Wall Street Journal article noted that larger operations may still be able to reap profits in times of lower prices, fueling "a cycle in which size begets size" and where, "smaller-scale farmers struggle to expand their operations to become profitable."
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Survey Sheds Light on Farm Profitability, While Producers Cut Costs

A  news release on Tuesday from the American Bankers Association (ABA) stated that, "Eighty-two percent of agricultural lenders reported a decline in farm profitability in the last 12 months, according to a joint survey by the [ABA] and the Federal Agricultural Mortgage Corporation. Despite the continued decline, the survey of more than 580 agricultural lenders revealed that the agricultural loan approval rate is 84 percent."
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Corn Belt: “Hoping to Breakeven,” in a “Persistently Weak” Ag Economy

An article on the front page of Saturday's Des Moines Register explored issues associated with corn and soybean production, prices, and farm profitability in Iowa.  Meanwhile, the Federal Reserve Bank of Kansas City released a paper last week which noted that, "Lending at agricultural banks appeared to stabilize in the third quarter of 2017, but risks in the sector have remained alongside a persistently weak agricultural economy."  Today's update includes highlights from these two current news items that shed additional light on the state of the Corn Belt farm economy.
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“Drowning In Grain”- Reuters Special Report on the Global Grains Glut

Reuters writer Rod Nickel reported yesterday that, "On Canada’s fertile Prairies, dominated by the yellows and golds of canola and wheat, summers are too short to grow corn on a major scale. But Monsanto Co is working to develop what it hopes will be North America’s fastest-maturing corn, allowing farmers to grow more in Western Canada and other inhospitable climates, such as Ukraine...The question, amid historically high supplies and low grain prices, is whether the world really needs more corn."
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