Recently, the Chicago Fed reported that prospects for 2024 farm income increased slightly, though income is still expected to fall below its 2023 level.
Springtime increases in corn, soybean and wheat prices brightened the outlook for the agricultural sector amid expectations of lower farm income this year than in 2023, according to Federal Reserve regional banks in their most recent Beige Book report. The Chicago and Dallas banks said the discovery of bird flu in dairy cattle was a cause for concern.
Corn, soybean and wheat prices moved higher. Most livestock prices were up, though egg prices were down. Continuing concerns about the financial impact of avian influenza in cattle were offset by additional support from the federal government.
The Dallas Fed reported that the spread of avian influenza among dairy cows remains a concern for the supply of milk, though it is not a food safety issue due to the pasteurization process. With drought conditions easing, cotton production should increase this year, but prices have slipped. Most other crop prices rose, while cattle prices eased off highs.
Conditions in the Tenth District agricultural economy softened through early May and farm finances tightened slightly, according to the Kansas City Fed. Corn, soybean and wheat prices increased slightly since April but remained weaker, keeping profit opportunities narrow.
The Minneapolis Fed said agricultural conditions in its district remained weak amid some positive developments, including a moderation in production costs. The St. Louis Fed said higher labor costs were an additional stressor in its region.
The Atlanta Fed reported that row crop farmers struggled amid low demand and excess supply, and many do not expect to turn a profit this year. Poultry producers saw some improvement in revenues from domestic sales, attributed to reduced supply resulting from avian influenza.
EDITOR’S TAKE:
Although commodity prices have improved for many commodities, the Federal Reserve Banks in major ag production areas are suggesting mixed results in 2024. They continue to point out the headwinds, especially as it relates to H5N1 bird flu. All that suggesting that overall farm income is still expected to be below the 2023 record level. That does not, however, spell disaster. It simply means that we will probably see an above average year with decent income prospects in most areas. This may be an excellent opportunity to promote AgPack®. If, in fact, farmers/ranchers have concerns about profitability, AgPack® is the perfect tool to help them offset thousands of dollars in operating costs. Couple that with CADFI, a tool to help manage their cash flow, and you have a great story to share on your social media or email campaign aimed at farmers/ranchers in your area.
