WASHINGTON (MNI) – The following is the latest Beige Book survey of
economic conditions in the Federal Reserve’s Ninth District, published
Wednesday:

NINTH DISTRICT–MINNEAPOLIS

Agriculture

District farmers mostly continued to benefit from favorable weather
conditions. Drought that was threatening corn and soybean production
throughout the Midwest has not had much effect on Minnesota and North
Dakota, where most of those crops were rated in good or excellent
condition. However, crop quality was somewhat weaker in Wisconsin and in
South Dakota, where drought conditions were more prevalent. Prices
received by farmers in Juneprior to drought damage in other parts of
the Midwestincreased from a year earlier for soybeans, hay, dry beans,
poultry, and cattle; prices decreased for corn, wheat, hogs, and dairy
products.

Employment, Wages, and Prices

Some tightening in labor markets was noted since the last report.
Across the District, some health care organizations indicated they were
planning to hire more workers, a number of retailers noted difficulty
finding sales associates to fill open positions, and manufacturers
continued to struggle to find skilled welders. According to the
aforementioned ad hoc survey of professional business services firms, 28
percent expect to increase hiring over the next three months, while 8
percent expect decreases in staff levels. However, in Minnesota an
electronics retailer will lay off an unspecified number of store and
technical support workers in the state, a paper company laid off about
260 workers following an explosion at the plant, and a cable company
laid off almost 70 salespeople.

Wage increases were moderate. Some contacts noted that compensation
increases were now similar to prerecession levels as wages and benefits
generally held steady during the past few years. Unionized grocery
workers in Montana reached labor agreements that include about a 2.5
percent pay increase and added contributions to health and pension
plans. Meanwhile, a nearly year-long lockout continued at a sugar beet
processing plant after union workers recently voted to reject the
management’s offer for a third time. Wages for truck drivers posted
larger increases.

Overall price increases were modest, and some decreases were noted.
Early July Minnesota gasoline prices decreased more than 10 cents per
gallon since the end of May. Metals prices, as well as several other
input costs, remained relatively level. One exception was a substantial
increase in the price of tires for mining machinery.

** MNI Washington Bureau: 202-371-2121 **

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