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Agriculture
AN EIGHTH DISTRICT PERSPECTIVE
SUMMER 1985

Eighth District Agriculture: A Statistical Overview
The Census of Agriculture, which is conducted every five years,
provides detailed information on the production of various
commodities and their percentage contribution to total agricultural
output. This information is important for many reasons, not the

The Composition of Farm Output
The results of the most recent census, conducted in 1982, are
reported in the table, which includes data for the four primary
Eighth District states as well as the four-state total.

Value of Agricultural Sales in Eighth Federal Reserve District States—1982
PRODUCT

ARKANSAS
°/o
mil. $

All Crops2

13541

48.0

G rain s3

1172

86.6

6

0.5

W h eat

188

16.0

Soybeans

520
27

C orn-grain

Sorghum
Oats
O ther grains
Cotton
Tobacco
O ther Crops

All Livestock
Poultry

KENTUCKY
mil. $
°/o

TENNESSEE
mil. $
%

MISSOURI
mil. $
°/o

FOURSTATE TOTALS
mil. $
%

42.9

8 49

50.4

5109

48.7

1385

89.5

4 42

52.1

3531

69.1

2 88

20.8

78

17.6

604

17.1

11.1

195

14.1

16.5

515

14.6

2 33

43.8

784

56.6

73
282

63.8

1819

51.5

3

0.6

90

6.5

7

1.6

127

3.6

0.0

0

0.0

2

0.1

0

0.0

2

0.1

26

1.9

1

0.2

460

13.0

81

9.5

273

5.3

1359

57.2

1547

5 32

39.1

2 32

43.6

59

44.4
2.3

0
428

36.5

5

0.9

142

10.5

0

0.0

50

3.2

0

0.0

768

56.5

9

0.6

224

26.4

1001

19.6

12.0

304

6.0

49.6

5381

51.3

40

3.0

59

4.3

103

6.7

102

1469

52.0

1018

42.8

206 0

57.1

834

1021

69.5

25

2.5

195

9.5

98

11.8

1339

24.9

9 94

18.5

Dairy

109

7.4

270

26.5

3 42

16.6

273

3 2.7

C attle and C alves

243

16.5

381

37.4

9 06

44.0

2 99

35.9

1829

34.0

Hogs and Pigs

67

4.6

142

13.9

5 95

28.9

148

17.7

952

17.7

O th er Livestock

29

2.0

2 00

19.6

22

1.1

16

1.9

267

5.0

Total

2823

2377

3607

1683

10490

1 Subtotals may not add up due to rounding.
2 Percentages of crop and livestock sub-categories refer to percents of crop or livestock sales, not percent of total agricultural sales.
3 Percentages of grain sub-categories refer to percent of grain sales, not percent of total agricultural sales.

least of which is an analysis of how District farm
income could be affected by various pending
changes in the 1985 Farm Bill. Of course, as farm
income is affected, the profitability of agricultural
banks and rural businesses will be affected as
well. To project the future of agriculture in the
Eighth District, it is important to know something
about its current organization.



THE
FEDERAL
I A RESERVE
RANK of
ST.m iJIS

The value of total output ranges from
Missouri’s $3.61 billion total production of
agricultural commodities to Tennessee’s $1.69
billion output. The data show that production is
essentially evenly divided between crop and
livestock products in Tennessee and Arkansas.
The somewhat larger share of crop output in
Kentucky is due, of course, to tobacco, which

FEDERAL RESERVE BANK OF ST. LOUIS

represents more than half of that state’s total crop output. In con­
trast, Missouri’s larger cattle and hog industries give more weight
to livestock production as a share of total output.
For analytical purposes, especially with regard to potential
changes in commodity price support programs, the composition
of total output is more revealing. For example, of the $5.1 billion
value of total crop output in the four District states, soybeans
represent about 35 percent or more than $1.8 billion of that total.
Tobacco, valued at $1 billion and concentrated heavily in
Kentucky, is the next largest District crop, followed by corn and
wheat valued at $604 and $515 million, respectively. Reductions
in loan rates, which support commodity prices directly, or target
prices, which determine the value of income transfers, would af­
fect not only farm prices and income but also the value of
resources used in farm production and their allocation among
alternative uses.
Although soybeans, the District’s major crop, have a support
price, it has been set until recently at a level sufficiently below
market prices that it has not attracted additional resources to soy­
bean production. Therefore, changes in the soybean program,
unlike the corn, wheat and tobacco programs, are not likely to
have major direct effects on crop prices or the values of resources
used to produce crops. However, insofar as changes in the corn
program reduce expected returns to corn production, resources
are likely to be shifted to soybeans from supported crops like
corn with effects on both soybean prices and production.
The remaining 65 percent of crop output also could be affected
substantially by changes in the current system of price supports
and income transfers. In addition to corn and wheat, prospective
changes in the tobacco, cotton and rice programs could have large
negative effects on farm income and asset values in those regions
where supported crops are prominent.

Livestock Production
The long-run returns to livestock production also are chang­
ing. National dietary patterns have revealed a rather sharp and
persistent trend away from red meats, especially pork, toward
poultry. This trend implies ongoing shifts not only in farm in­
come and prices, but also in the values of resources employed
in the production of various livestock products.
Only Arkansas, however, shows a significant presence in the
poultry industry. While poultry represents about two-thirds of
all livestock production in Arkansas and more than one-third of
its total agricultural output, it represents about 10 percent of
livestock output in the other District states. In fact, about threefourths of Missouri’s livestock income is derived from the red
meats group, while the share in Kentucky and Tennessee is slight­
ly more than one-half. The general conclusion from this over­
view is that income derived from livestock production is likely
to decline in three District states in the years ahead.

SUMMER 1985

Farmland Values in the Eighth District

Farmland Values Continue
Their Decline
Farmland values have fallen sharply since their peak in 1981.
Nationally, the average value of farm real estate has declined more
than 18 percent over the past four years. Moreover, the 12 per­
cent decline between April 1984 and April 1985 was the largest
single-year decline since 1933.
While farmland values also fell in all Eighth District states (see
the figure), the extent of their declines varied widely and appears
to be related to an individual state’s reliance on corn and soy­
beans as cash crops. For example, Tennessee (-6 percent), Arkan­
sas (-9 percent), Kentucky (-10 percent) and Mississippi (-11 per­
cent), whose farm economies tend to be more diversified and less
dependent on the production of these crops, saw reductions in
land values smaller than the national average. Conversely, In­
diana (-21 percent), Missouri (-23 percent) and Illinois (-27 per­
cent) realized declines substantially higher than the national
average and are much more reliant on corn and soybeans as
primary sources of farm income. Because land values are deter­
mined by the real net income a given parcel of land can generate,
further declines appear likely unless expectations about the future
of crop prices are increased substantially.
—Michael T. Belongia

Agriculture—An Eighth District Perspective is a quarterly summary of agricultural conditions in the area served
by the Federal Reserve Bank of St. Louis. Single subscriptions are available free of charge by writing: Research
and Public Information Department, Federal Reserve Bank of St. Louis, P.O. Box 442, St. Louis, Missouri 63166.
Views expressed are not necessarily official positions of the Federal Reserve System._______________________




FEDERAL RESERVE BANK OF ST. LOUIS

SUMMER 1985

EIGHTH DISTRICT AGRICULTURAL DATA
P ercent Change
Prices and C o sts 1

M ar.
1985

Apr.
1985

May
1985

C O N S U M E R P R IC E IN D E X (% cha n g e )
N onfood
Food

0.6 %
-0 .2

0 .5 %
-0 .4

0 .3 %
-0 .4

P R O D U C T IO N C O S T S FOR F A R M E R S (% cha n g e )
A ll inputs
F e rtilize r
A g ric u ltu ra l ch e m ica ls
Fuels and e n e rg y

-0 .6
- 1.4
-0 .8
1.6

P R IC E S R E C E IV E D BY F A R M E R S (% change)
A ll p ro d u cts
L iv e sto ck
C rops

0.0
0.0

Average
for 1984

0 .3 %
0.3

Year-To-Date
19852

Same Period
Year Ago

2 .0 %
-0 .1

1.9 %
1.6

-1 .6
3.1

-0 .7
-1 .5
1.6
1.0

-0 .1
0.2
0.2
-0 .1

-0 .7
-2 .9
-0 .8
2.5

1.3
8.1
2.4
1.0

-0 .7
-3 .4
1.6

-2 .2
-2 .9
-1 .6

-1 .5
-1 .5
-0 .8

-0 .3
0.1
-0 .7

-4 .4
-7 .6
-0 .8

3.6
1.4
6.6

FE E D E R C AT T LE
W h o le sa le p rice - K ansas C ity ($/cw t.)

$ 67.40

$68.60

$67.04

$ 6 5 .3 2

1.1

3.2

FE E D E R PIG S
W h o le sa le p rice - So. M isso u ri ($/head)

$46.31

$43.67

$39.39

$ 3 9 .1 3

10.7

55.0

B R O ILE R S
W h o le sa le p rice - 12-city ($/lb.)

49.70$

47.77$

51.81$

5 5.54$

6.1

0.8

TURKEYS
W h o le sa le p ric e - N ew Y ork,
8-16 lb. yo u n g hens ($/lb.)

67.04<P

64.52$

62.64$

74.48$

-3 5 .6

-1 1 .0

CORN
W h o le sa le p rice - No. 2, y e llo w - St. Louis ($/bu.)

$ 2.86

$ 2.88

$ 2.81

$ 3.2 7

2.2

3.8

SOYBEANS
W holesale price - No. 1, yellow - Central Illinois ($/bu.)

$ 6.08

$ 6.13

$ 5.95

$ 7.06

-0 .3

10.8

W HEAT
W h o le sa le p ric e - No. 1, h ard w in te r K ansas C ity ($/bu.)

$ 3.67

$ 3.62

$ 3.42

$ 3.80

-9 .0

-3 .4

LO N G -G R A IN RICE
W h o le sa le p rice - A rka n sa s ($ /cw t.)

$17.94

$17.75

$17.83

$ 1 8 .4 3

-1 .4

-1 .5

-0 .4

9.8

CO TTO N
A v e ra g e p rice re ce ive d by U .S. F a rm e rs ($/lb.)

54.50$

55.90$

55.60$

6 5.47$

U.S. Exports

Jan.
1985

Feb.
1985

Mar.
1985

Average
for 1984

209.0
72.5
109.0
3.8
835 .6

167.0
80.6
93.0
5.9
810.6

172.0
67.9
65.0
5.8
648.5

162.1
5 9 .6
134.2
5.4
5 8 0 .4

Percent Change

C orn (m il. bu.)
S o yb e a n s (m il. bu.)
W h e a t (m il. bu.)
R ice (ro u g h e q u iv a le n t, m il. cw t.)
C o tto n (thou, bales)




Year-To-Date
19852
-1 7 .3 %
-2 2 .2
-5 1 .5
2 6 .7
-1 .7

Same Period
Year Ago
0 .7 %
-5 .8
-3 .5
29.4
42 .8

3

Non Real Estate Farm Debt Outstanding
Banks
Outstanding
($ millions)

u.s.
E ig h th D is tric t4
A rk a n s a s
K e n tu c k y
M isso u ri
T e n n e sse e

$ 3 8 ,2 9 4
2,6 6 6
429
673
1,422
338

PCAs3

Percent Change3/84 - 3/85
3/83 - 3/85
-2 .2 %
-2 .5
-6 .8
5.4
-4 .8
-4 .8

5 .1 %
5.8
1.2
12.8
-0 .9
-3 .4

Outstanding
($ millions)

Percent Change
3/84 - 3/85
3/83 - 3/85

NA
NA
$297
325
357
311

NA
NA
-1 6 .8 %
-2 8 .3
-1 8 .8
-2 9 .0

NA
NA
- 2 3 .2 %
-4 3 .6
-2 .5
-3 9 .4

Agricultural Bank Loan Performance5
Percent of Net Loan
Charge-Offs at
Agricultural Banks

Percent of Overdue
Farm Loans at
Agricultural Banks
3/85
U .S.
E ig h th D is tric t4
A rk a n s a s
K e n tu c k y
M isso u ri
Tennessee

6 .1 %
7.1
8.5
6.3
8.3
5.8

3/84

3/83

4 .4 %
5.0
6.8
6.5
5.0
4.4

3 .3 %
2.9
3.3
2.6
2.9
3.7

3/85

3/84

.3 2 %
.29
.42
.12
.43
.27

.1 5 %
.11
.20
.10
.16
.10

Agricultural Production Loan Interest Rate6
PCAs

Banks

E ig h th D is tric t A v e ra g e

5/85

5/84

12.4%

13.3%

4/85
1 2 .5 %

4/84
1 2 .0 %

1 The consumer price index components are seasonally adjusted. All other data are not seasonally adjusted.
2 Percent change from December of previous year, based on the most recent month available.
3 Source: Farm Credit Banks of Louisville and St. Louis, Farm Credit Administration.
4 Includes all of AR and parts of IL, IN, KY, MO, MS and TN.
5 Agricultural banks are defined as those with more than 25 percent of total loans in agricultural loans.
6 Interest rate data are for different dates. PCA rates are weighted averages for Arkansas and Missouri, not adjusted for stock purchase requirements.
Source: Farm Credit Banks of St. Louis.




3/83
.1 1 %
.12
.16
.21
.15
.19


Federal Reserve Bank of St. Louis, One Federal Reserve Bank Plaza, St. Louis, MO 63102