Agricultural Economy

Last week, the Federal Reserve Banks of Kansas City and Minneapolis released updates regarding farm income, farmland values and agricultural credit conditions.  Today’s update contains highlights from the Fed reports.

Logan Garcia, Market Reporter — at Fertecon, S and P Global Commodity Insights, reported last week at DTN that, “January began a reset across the nitrogen complex with anhydrous ammonia, urea and UAN fertilizer prices falling sharply to open 2023, a fall attributed mostly to a lack of demand across all products as well as further reductions in European natural gas prices last month.”

On Friday, the USDA’s National Agricultural Statistics Service (NASS) released its annual Farms and Land in Farms report.

On Wednesday, the U.S. Department of Agriculture released its 10-year projections for the food and agricultural sector.

Wall Street Journal writer Gwynn Guilford reported on the front page of today’s Wall Street Journal that, “Still-elevated inflation cooled slightly at the start of 2023 to 6.4% in January from a year earlier, with energy, housing, food and other items keeping some pressure on prices.”

DTN writer Russ Quinn reported last week that, “Average retail fertilizer prices moved lower again the last week of January 2023, continuing a trend that has been present since just before the beginning of the year, according to retailers surveyed by DTN.”

On Thursday, in the Federal Reserve Bank of Chicago’s quarterly AgLetter, David Oppedahl explained that, “In 2022, the District saw a strong annual increase of 12 percent in its farmland values.”

The USDA’s Economic Research Service (ERS) indicated on Tuesday that, “Farm sector income is forecast to fall in 2023 following two years of strong growth.”

Reuters writer Crispian Balmer reported today that, “World food prices fell in January for a 10th consecutive month, and are now down some 18% from a record high hit last March following Russia’s invasion of Ukraine, the United Nations food agency said on Friday.”

In its February Market Monitor report, the Agricultural Market Information System (AMIS) indicated that, “Fertilizer prices have declined by more than 40 percent since hitting record (nominal) highs last spring, especially due to recent drops in natural gas prices and fertilizer plants reopening in Europe.”

Bloomberg writers Michael Hirtzer and Elizabeth Elkin reported yesterday that, “Steaks and hamburgers will likely be more expensive in the next few years with US cattle shrinking to its lowest herd since 2014.”

Emiko Terazono reported on Saturday at The Financial Times Online that, “Fertiliser and crop prices have fallen sharply since their peaks after last year’s Russian attack on Ukraine.”

DTN writer Russ Quinn reported yesterday that, “Most average retail fertilizer prices were lower the third week of January 2023, according to sellers surveyed by DTN.”

In an update last week from the Federal Reserve Bank of Kansas City, “Rebound in Farm Lending Continues,”  Cortney Cowley and Ty Kreitman indicated that, “Farm lending activity continued to increase gradually alongside further growth in loan sizes.”

Dan Frosch reported in today’s Wall Street Journal that, “Nearly a year after it began, the worst avian-influenza outbreak in U.S. history is continuing to decimate poultry flocks across the Midwest and Colorado, frustrating efforts to keep the virus from affecting the nation’s egg prices and supply.”

In its monthly Livestock, Dairy, and Poultry Outlook report yesterday, the USDA’s Economic Research Service indicated that, “Table-egg production was estimated at 635.0 million dozen in November.”

On Wednesday, the Federal Reserve Board released its January 2023 Beige Book update, a summary of commentary on current economic conditions by Federal Reserve District. The report included several observations pertaining to the U.S. agricultural economy.

Financial Times writers Colby Smith and Kate Duguid reported yesterday that, “Annual US inflation fell in December to its lowest level in more than a year, in a further sign that price pressures have peaked amid the Federal Reserve’s historic campaign to tighten monetary policy.”

Patience Haggin reported in today’s Wall Street Journal that, “Machinery manufacturer Deere & Co. signed a memorandum of understanding with the American Farm Bureau Federation on Sunday that the group said ensures farmers can repair their own farm equipment or take it to independent repair shops.”

Bloomberg writer Megan Durisin reported today that, “After a year marred by disruptions from the war in Ukraine and extreme weather, global food prices ended 2022 roughly where they started.”