The Federal Reserve published its latest Beige Book last week. That’s the report we get eight times each year, with a broad, kind of anecdotal account of how economic activity is changing across the country.

One item that got our attention: the agriculture economy. The report noted that, “activity in the agricultural sector remained weak.”  

The Beige Book noted some poor growing conditions and stricter loan practices, among other things.

Clayton Johnson farms in the southwest corner of Minnesota.

“I farm with my dad. We farm corn, soybeans, a little bit of oats and a little alfalfa,” said Johnson.

Plus a few cows and pigs. “So we got a little bit of it all,” he said.

Johnson said he’s happy with the summer growing season so far.

“In my little area, we’ve just been getting by with timely rains,” he said.

But even though the weather has been cooperating for Johnson, the same can’t be said for market forces impacting his operation. He said the cost for fertilizer and pesticide applications has been rising.  

“Honestly, it’s scary. Input costs keep going up. Our commodity prices keep going down,” Johnson said.

Low prices for commodity crops are a problem for farmers all over the country right now. Corn, soy bean and wheat prices are all fetching lower prices than they were three years ago.

Brandon Gerrish is an extension specialist at Texas A&M University. He said some wheat growers chose to not harvest their crop at all this year, and let the livestock have it instead. Beef prices are at a record high right now.

“Years like this, where wheat prices are low and, and beef cattle prices are high. We see a lot more producers grazing out their wheat rather than bringing it to grain harvest,” said Gerrish.

Mitchell Hora farms wheat — as well as corn, rye and soybeans in Southeast Iowa. And while he’s noticed the rising input costs, for Hora, “that’s not that huge of a deal,” he said.

Because, Hora said, he’s invested in building up the health of his soil. He rotates his cash crops through different fields each growing season, and he plants cover crops over the winter.

“We've been doing these things now for more than a decade, very diligently, and that's led us to be able to reduce our fertilizer usage by about 50%. And reduce our pesticide usage by nearly 75%,” he said.

Hora said that’s improved his farm’s resilience, against both weather conditions and economic ones.