Farm Loan Delinquencies Reach New Low

Despite falling net farm incomes, rising interest expenses, and generally low producer sentiment, Agricultural Economic Insights says farm loan delinquencies improved in 2023. Across all commercial banks, the share of farm loans classified as delinquent fell to only 0.91 percent in the fourth quarter of last year. The previous low points in farm real estate delinquency rates were from 2005 to 2007 and 2014 to 2015. It’s worth noting that loan delinquencies at those times dipped to 1.5 percent. The current dip featuring delinquency rates below one percent is uncommon. The average fourth-quarter delinquency rate has been 2.2 percent since 1991. However, farm real estate deficiencies haven’t been meaningfully above the long-run average since 2012. Delinquency rates for farm non-real estate loans also fell in 2023, reaching 0.71 percent. While also historically low and below the long-run average of two percent, the lowest non-real estate delinquency rate was 0.59 percent in 2014. 

Tuesday Watch List

Markets

Traders continue to keep close watch over the weather in various parts of the world. The Federal Reserve begins its two-day meeting and will be able to include Wednesday's consumer price index in its interest rate decision at 1 p.m. CDT Wednesday.

Weather

A small system is moving through Manitoba Tuesday morning with showers across the Upper Midwest that should become more isolated. Showers and thunderstorms are found across west Texas and the Florida Panhandle as well, but most of the country is mild and dry for the day.

Support AM Radio in Every Vehicle

AM radio is a lifeline for many individuals, particularly those living in rural areas with limited access to reliable internet or cell phone coverage. In 2023, several automakers announced they had removed or planned to remove broadcast AM radio receivers from electric vehicles due to electromagnetic interference generated by electric batteries. AM radio helps keep rural residents apprised of news that may impact their businesses, health care, education, and family. It’s also available when the power goes out and cell towers go offline. The AM Radio for Every Vehicle Act ensures this essential service is accessible to all Americans. The American Farm Bureau, the National Association of Broadcasters, and the National Association of Farm Broadcasting are asking you to let lawmakers know how important AM radio is and ask them to support the act. Go to the Farm Bureau website and participate in the action alert by sending a message at fb.org/action-alert.

Minnesota Reports First Case of H5N1 in Dairy Cattle

Highly Pathogenic Avian Influenza has been confirmed in a dairy herd in Benton County, Minnesota, the state’s first confirmed case of H5N1. A producer noticed clinical signs in a handful of cows, and the next day more than 40 cows had signs of a fever. Samples from the sick cows were tested at the University of Minnesota and USDA, and both confirmed the virus. “We knew it was only a matter of time before this detection would reach our doorstep,” says Minnesota State Veterinarian, Dr. Brian Hoefs (Huffs). “It’s important for dairy farmers to follow the example of this herd and test sick cows.” HPAI symptoms in dairy animals mostly affect late-stage lactating cows, and include a fever, a drop in milk production, loss of appetite, and changes in manure consistency. No matter the status of each herd, biosecurity can reduce the risk of disease spreading onto or off farms.

Food Prices Slightly Higher in May

The U.N. Food and Agricultural Organization’s Food Price Index stood at 120.4 points in May, up 0.9 percent from its revised April level. Increases in the price index for cereal and dairy products slightly more than offset decreases in those for sugar and vegetable oils. The meat index was unchanged. It was the third consecutive monthly rise in the index but still remained down 3.4 percent from the same time in 2023 and 25 percent below the peak in March 2022. The Cereal Price Index took the biggest jump in May, rising 7.3 points, or 6.3 percent, from April to average 118.7 points in May. The Sugar Index saw the biggest drop, coming in at 117.1 points, down 9.5 points or 7.5 percent. The Meat Price index averaged 116.6 points in May, down 0.2 points. The Dairy Price Index reached 126 points, up 2.3 points, or 1.8 percent, from April.

Grains Council Travels to Mexico to Talk Trade

U.S. Grains Council Chair Brent Boydston and Past Chair Josh Miller went south of the border for meetings with major stakeholders in the U.S. and Mexico corn trade market. The goal was to maintain positive communications and relationships with one of U.S. agriculture’s most valuable customers. “With the recent political obstacles and challenges to rail transport logistics affecting grain imports from Mexico, it’s vital for the Council to work in tandem with the USDA’s Foreign Agricultural Service in Mexico to keep shipments moving,” Boydston says. “U.S. producers and Mexican importers and end-users alike need reassurance that trade will continue operating smoothly, and it’s our duty to facilitate that goal.” The delegation also met with staff from a leading global food production company that offers products in 112 countries to discuss how U.S. producers can meet the company’s demand. USGC is trying to keep U.S. ag as the premier option for Mexican importers.

Ag Retailers Report Their 2024 Outlook

The nation’s top ag retailers responded to a CropLife Survey on their 2024 outlook. The survey asked retailers about their overall outlook on the 2024 growing season based on market performance through spring fieldwork and planting time. On a scale of one to 10, with 10 being “better than expected,” the retailers seem pleased with 2024. A little more than eight out of 10 survey respondents rated the year so far between a five and a ten. To break it down further, 53 percent of the nation’s top ag retailers said the 2024 growing season rates between a five and seven on their 10-point scale. Another 33 percent indicated that so far, the year rates as an eight to 10 in their regions of the country. Compared to last year, that was a six percent improvement over 2023. Only 14 percent rated the season between a one and four.