Natural Resource Industries Oil output in North Dakota has risen to its highest point this decade, and drillers for both oil and gas in that state and Montana continue to benefit from a mild winter. However, while rig counts remain high compared to earlier in the decade, industry sources warn that dropping energy prices soon will curtail drilling since most wells in the district are high-cost relative to yield. One mine cut its projected output slightly and laid off some 20 workers. A Montana gold mine closed with the loss of nearly 300 jobs due to low gold prices and to unrelated financial problems in the parent firm. Forest product output is expected to be largely steady in western areas of the district due to cutting constraints, but strong in Minnesota and Wisconsin as oriented strand board plants run at capacity to meet builders' demand.
Paper production is described as steady to moderately stronger.
That observation has been true for several months, but recent declines in corn, soybean and hog prices have extended the region in which farmers are under financial stress. Corn and soybean prices have also weakened from early winter, though relative to costs are still more favorable than that of wheat. Farmers in the western Dakotas and Montana are concerned about unusually small snowpacks, low reservoir levels and inadequate soil moisture. Banking Pricing competition reportedly is intense. The competition for loans raises some bankers' concerns about future credit quality.