Beige Book: Ag Conditions 'Mixed' Amid Drought

July 18, 2012 08:46 AM

The Federal Reserve's Beige Book says reports from the twelve Federal Reserve Districts indicate that overall economic activity continued to expand at a modest to moderate pace in June and early July. The Atlanta, St. Louis, and San Francisco Districts reported modest growth, while Boston, Chicago, Minneapolis, Kansas City, and Dallas described economic activity as advancing moderately. The New York, Philadelphia, and Cleveland Districts noted that activity continued to expand, but at a slower pace since the last report, while Richmond cited mixed activity.

In its assessment of agriculture, the report states: "Agricultural conditions were mixed since the previous report. Several Districts noted areas of increased drought resulting in stress to crops and livestock, while rainfall provided needed moisture to parts of the Atlanta District. With high heat and drought cited as the cause, the Chicago and Kansas City Districts reported concerns for their corn and soybean crops, while the Minneapolis District reported that favorable weather conditions contributed to their corn and soybean crops doing well. The Kansas City and Dallas Districts reported drought-stressed pasture conditions, although the Dallas District noted much better crop conditions than this time last year. The St. Louis and Kansas City Districts reported better-than-expected yields for the winter wheat crop nearing completion. The San Francisco District noted further sales growth for many crop and livestock products, attributed in part to overseas growth, but suggested that this source of growth was decreasing. The Kansas City District cited rising export demand as the reason some hog producers expanded production. Agricultural price reports were mixed. While June corn prices were reported down on a year-over-year basis, reports of corn crop deterioration was noted by the Chicago and Kansas City Districts as having pushed corn prices sharply higher since the end of June.

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