Agricultural Economy

Last week, the Federal Reserve Banks of Chicago, Kansas City and Minneapolis released updates regarding farm income, farmland values and agricultural credit conditions from the second quarter of 2021.

Financial Times writer Colby Smith reported on Wednesday that, “The rapid pace of US consumer price increases steadied at a 13-year high in July while month-on-month gains moderated slightly, as inflationary pressures persisted because of supply-chain constraints and soaring demand.”

Wall Street Journal writer Jacob Bunge reported on Monday that, “Tyson Foods Inc. projected higher meat costs ahead, as the meat company seeks to pass along elevated prices for animal feed, increased wages and ongoing pandemic expenses to restaurants and supermarkets.”

Late last week, Bloomberg News reported that, “China will initiate a warning guidance system for hog breeders that will encourage them to make changes to their population of sows in an attempt to maintain sustainable output of the meat.”

Recent reports from the USDA’s National Agricultural Statistics Service (NASS) regarding farmland values, cash rental rates, production expenses, and farm prices provide perspective on the current state of the U.S. farm economy.

An update yesterday from the Federal Reserve Bank of Kansas City (“kcFED Ag Bulletin”) stated that, “Agricultural commodity prices surged in the second quarter amid further increases in economic activity and robust global demand.”

Reuters News reported today that, “World food prices eased for a second month in a row in July, reflecting declines for cereals, vegetable oils and dairy products, but remained up nearly a third over the past year, the United Nations food agency said on Thursday.”

Late last week, Associated Press writer Scott McFetridge reported that, “Thanks to a reworked menu and long hours, Jeannie Kim managed to keep her San Francisco restaurant alive during the coronavirus pandemic.”

Bloomberg News reported this week that, “China is taking hog biosecurity to new levels — 13 stories in fact.”

Reuters writers Julie Ingwersen and Tom Polansek reported last week that, “The U.S. Department of Agriculture confirmed the deadly hog virus African swine fever in samples from pigs in the Dominican Republic, the agency said on Wednesday, fueling concerns about the disease creeping closer to the United States.”

Bloomberg writer Michael Hirtzer reported this week that, “A little-known market, that of young cattle, is signaling that pricey beef could be here to stay awhile.”

At the end of last week, Bloomberg News reported that, “Extreme weather is slamming crops across the globe, bringing with it the threat of further food inflation at a time costs are already hovering near the highest in a decade and hunger is on the rise.”

In an update late last week from the Federal Reserve Bank of Kansas City (“Interest Rates for Operating Loans Rise Slightly From All-Time Lows”), Nathan Kauffman and Ty Kreitman pointed out that, “Interest rates on agricultural loans made by commercial banks increased slightly for some types of lending, but remained historically low through the first half of 2021.”

Reuters writers Emily Chow and Dominique Patton reported this week that, “China’s second-quarter pork production surged to its highest in at least seven years, official data showed on Thursday, after producers launched thousands of new breeding farms last year to rebuild a hog herd decimated by the African swine fever.”

On Wednesday, the Federal Reserve Board released its July 2021 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.

Reuters News reported this week that, “China will no longer require small pig farms to get environmental approval from the government before breeding pigs as the country seeks to rebuild its hog herd following a disease outbreak, the agriculture ministry said on Monday.”

Reuters writer Dominique Patton reported on Friday that, “Large numbers of pigs are dying from African swine fever in China’s top hog-producing province, say farmers and analysts, raising concerns it could spread further across the south and slow China’s pork production recovery.”

Reuters News reported this week that, “World food prices fell in June for the first time in 12 months, pushed lower by declines in vegetable oils, cereals and dairy products, the United Nations food agency said on Thursday.”

Last week, Nathan Kauffman and Ty Kreitman, of the Federal Reserve Bank of Kansas City, penned an update titled, “Farm Debt Declines Further and Credit Stress Eases,” which noted that, “Agricultural debt at commercial banks continued to decline in the first quarter of 2021 and farm loan performance improved.”

A news release this week from the American Bankers Association (ABA) stated that, “Despite the global economic slowdown in 2020 due to COVID-19, total agricultural lending by U.S. farm banks remained strong at $98.6 billion, decreasing by only 1.8% from the year before according to the American Bankers Association’s annual Farm Bank Performance Report.”