A Dip in the Farm Economy

A decline in farm income accelerated slightly in the second quarter as crop prices plummeted in June. In contrast to earlier signs of income stabilization, more District bankers reported a decrease in farm income (Chart 1). The sharp decline in crop prices likely contributed to reduced income. In June alone, prices for U.S. soybeans dropped 17 percent. In addition, from the beginning of May to mid-July, corn prices also dropped 17 percent. Despite the steep declines in crop prices, however, the effect on farm income was somewhat limited with several months remaining before harvest begins.