By Tracy Will
WisBusiness.com
The Federal Reserve Beige Book released Oct. 21 from Minneapolis and Chicago reported improving trends in Wisconsin and “cautious optimism for improvement,” during the final quarter of 2009. The Fed uses anecdotal information from regional businesses to compose its Beige Book reports.
Wisconsin’s manufacturing sector was poised to improve production thanks to low costs for recycled steel. Chicago’s Fed report said,” manufacturing activity in the District was slightly improved in September and early October. Lean inventories and stronger demand from the auto sector led to an increase in demand for steel. Other metals-related manufacturers also reported small gains.”
The Minneapolis Fed reported “agriculture, consumer spending and tourism were mixed,” across the region, which includes northern Wisconsin.
Southern Wisconsin farmers faced higher corn prices and slightly lower soybean prices, but harvest was slow due to rain and late crop maturity. Farmers will find good commodity prices and improved prices for cattle during harvest season due to low inventories, a surprise during an otherwise disappointing crop year.
The Minneapolis Fed reported, “parts of western Wisconsin and Minnesota were in severe drought, and the progress of harvest of major District crops was behind the five-year average.” Livestock operators in the region were also feeling pinched by low meat prices and higher-priced feed.
The Chicago report said paper prices were also up which should benefit Wisconsin’s tissue and paper mills.
Chicago reported that small businesses continued to face tight credit and slow retail sales, which will stall the recovery of that sector well into 2010.
