Federal Reserve survey: Costs, volatile market top concerns

CHICAGO — There's heightened concern across the Corn Belt due to the surge in fertilizer and fuel prices, combined with a volatile commodity market.

The survey-based overview of the economic conditions across the Federal Reserve Districts was documented in its Beige Book based on information collected on or before April 6.

Each report is based on qualitative information gathered directly from business and community leaders from various industries, including agriculture, within a district's region. The report is published eight times a year.

This document summarizes comments received and is not a commentary on the views of Federal Reserve officials.

Here are what the Corn Belt districts reported regarding the agricultural conditions.

Chicago

Expectations for 2026 Seventh District farm income declined overall during the reporting period as input costs rose faster than agricultural product prices.

"Fertilizer and fuel prices increased, though a substantial share of farmers had preordered fertilizers and locked in pricing prior to the reporting period. Contacts said that some farmers would plant more soybeans and less corn than originally planned because soybeans require less fertilizer," according to the survey.

"Corn, soybean and wheat prices increased over the reporting period as did cattle, hog, egg and dairy prices. Sales of used farm machinery increased."

Specialty crop producers that hire H-2A workers expected greater profitability in 2026 after policy adjustments lowered H-2A wage rates.

The Seventh District of Chicago includes the northern two-thirds of Illinois and Indiana, all of Iowa, the southern two-thirds of Wisconsin and Michigan's Lower Peninsula.

St. Louis

Agriculture conditions have remained unchanged since the previous Eighth Federal Reserve District report.

Contacts reported that the conflict in the Middle East had created significant volatility in the agriculture sector, impacting agriculture equipment sales and resulting in sharp fertilizer cost increases.

Bankers lending to farmers reported no significant changes in delinquency rates; however, a banker in Arkansas noted tightening their lending standards for this sector.

"Some farmers are optimistic about pricing and weather conditions and expect improved financial performance this year, after weak yields last year. But rural bankers remain pessimistic about economic growth for their regions over the next six months," the report said.

The St. Louis Federal Reserve District includes the southern parts of Illinois and Indiana and eastern half of Missouri, as well as parts of Tennessee, Arkansas, Kentucky and Mississippi.

Minneapolis

Ninth District agricultural conditions remained weak since the previous report.

Contacts viewed recent increases in cash prices for grains and soybeans positively, but expected that sharp increases in diesel and fertilizer input prices would squeeze margins.

Reports going into planting season indicated that district farmers were planning to increase corn acreage, but market volatility cast considerable uncertainty on that decision.

District oil and gas exploration activity increased slightly from the last report.

The Minneapolis-based district includes all of Minnesota, the Dakotas and Montana, the northern one-third of Wisconsin and Michigan's Upper Peninsula.

Kansas City

"Conditions in the Tenth District farm economy remained bifurcated, amidst heightened uncertainty from recent volatility in commodity and fertilizer markets. Crop prices increased in March, but profits remained narrow, and a surge in fertilizer and fuel prices raised concerns about increased costs," the report said.

Strong cattle prices supported cow-calf profits and boosted incomes in many areas.

Agricultural lenders reported gradual deterioration in loan repayment rates and material increases in carryover debt and loan restructuring compared with a year ago.

Despite ongoing challenges, farm real estate values remained steady, and many lenders cited better-than-expected crop yields in 2025 and government assistance as additional sources of support.

The Kansas City-based district includes the western part of Missouri, Kansas, Nebraska, Oklahoma, Wyoming, Colorado and northern New Mexico.