WASHINGTON (MNI) – The following is the second part of the latest
Beige Book survey of economic conditions in the Federal Reserve’s
Seventh District, published Wednesday:
Prices/costs
Raw materials prices declined, but continued to put pressure on
costs in September. Prices for industrial metals like copper and steel
eased further, but contacts again reported extended lead times for
specialty metals as well as some shortages. Energy prices were also
lower, and fuel surcharges began to decline. Conversely, retailers
indicated that wholesale price pressures intensified, with food prices
still elevated and prices for cotton-based goods rising. While some
retailers continued to absorb some of these higher costs in their
margins, pass-through to downstream prices increased. Wage pressures
remained moderate.
Agriculture
Harvest conditions varied across the District. Some parts were
experiencing a slower-than-usual harvest due to late planting or fall
rains that degraded crop quality. Other portions of the District were
experiencing a fairly normal harvest. Corn and soybean yields appeared
to be lower and more variable than a year ago. Nonetheless, yields were
adequate to replenish inventories to levels that eased worries about
shortages. Inventories also were boosted over the summer by lower
exports and reduced usage of crops for livestock feed. Corn and soybean
prices did back off during the reporting period; however, a sizeable
portion of the crop had been sold prior to this decline. Lower prices
for feedstocks provided relief to livestock operators. Prices for milk
and hogs declined while cattle price rose; all three remained above the
levels of a year ago. Farmland values and cash rental rates continued to
rise in the District.
(2 of 2)
** Market News International Washington Bureau: 202-371-2121 **
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