Sawmills, building board manufacturers and paper mills in Minnesota, Wisconsin, and Michigan's Upper Peninsula describe output as steady, but there is a noticeable decrease in forest production in Montana, with two sawmills and a cardboard plant reportedly closing. Iron mining in the Lake Superior region shows some signs of slowing after two years of all-out production. One mine is laying off 70 workers and some others are reportedly contemplating production cuts in the face of ore pellet inventories 25 percent higher than a year ago. But a steel industry source says this is more a result of continuing structural change in the sector, as mini-mill output continues to grow at the expense of integrated producers, and not as the result of any slowing of demand for steel products. These comments are representative of many across the manufacturing sector, which seems characterized by solid, but not spectacular growth.
Hay supplies remain well below usual levels and prices high in many areas of the district.
Farmers have been on a weather roller coaster this summer as near-drought in June turned into excessive rain, hail, and successive thunderstorms in July. On the whole, crops in most areas are in good, but not excellent, condition. USDA's predicted spring wheat yields for North Dakota are down about 25 percent compared with 1996 and those for Minnesota are down about 10 percent. In corn-soy areas, prospects are for an average crop. Hog and cattle producers continue to enjoy higher prices than a year ago, and bankers who responded to the second quarter survey of agricultural credit conditions by the Minneapolis Fed generally are more optimistic about prospects for their cattle- producing customers.