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Posted on Apr 14, 2017

Northwest agricultural markets spring into 2017

With a cold, wet winter in the rearview mirror, food and fiber producers in the Northwest are getting back into their fields. For some sectors, profit margins look promising, and for others, the profit outlook is weak. Northwest Farm Credit Services, which describes itself as an $11 billion financial cooperative and a member of the nationwide Farm Credit System, provided the following highlights for Northwest agriculture on April 6.

Northwest hay markets are stronger as colder-than-normal weather and prolonged periods of snow cover drove cow/calf producers to feed substantially more feeder hay than anticipated. This is a boon to the industry as feeder hay inventories move lower going into the 2017 production season. Although prices are down 9 percent from the prior year, the total value of forage exports increased from 2015 to 2016. Currently, most hay producers are operating at or below break-even margins. However, Northwest FCS’ 12-month outlook is for slightly profitable returns for producers who start 2017 with a clean inventory slate and focus on cost control.

Winter wheat crop conditions throughout the Northwest are good to excellent, supported by ample winter snows and abundant spring precipitation. Bloated world stocks and low prices continue to limit wheat growers’ profitability. Northwest FCS’ 12-month outlook includes break-even results and expectations for profits where producers’ rotations include pulse crops and/or above-average yields.

A cool, wet spring has delayed Northwest potato growers’ fieldwork and planting by as much as two weeks later than normal. Northwest FCS’ 12-month outlook for profitability includes slightly profitable results for contract potato growers and continued pressure on uncontracted potato growers’ profits.

Sugar beets
Entering spring, sugar beet growers’ planting is delayed by as much as two weeks due to above-average precipitation. Among row crops, sugar beets remain a favored rotation. Northwest FCS’ 12-month outlook for profitability includes modest profitability for the 2017 crop.

A long winter and late spring has delayed planting by as much as three weeks. A late start to the growing season may lead to lower yields in 2017. However, favorable weather conditions through the summer can put crops back on track. Onion growers’ current returns are below breakeven. The 12-month outlook for profitability remains low, with slightly higher prices for high-quality old crop coming out of storage.

Headwinds moving forward include sales of traditional varieties facing lower demand and fruit with larger profiles. Northwest FCS’ 12-month outlook for profitability is positive for growers whose varietal mix meets consumer demand.

Fewer cherry pests and virus issues, as well as a better-timed harvest, are potentially positive results of a cold Northwest winter. A crop size similar to 2016 and expectations for a well-timed harvest support a profitable 12-month outlook for the cherry industry.

No significant damage is reported after several pear-growing areas in the Northwest experienced negative temperatures this winter. Despite slow shipments and weak export markets, Northwest FCS’ 12-month outlook is for stable pear-grower profits, supported by harvest yields, packouts and favorable prices.

Wine, vineyards
Washington, Oregon and Idaho produced another high-quality vintage in 2016, with Washington harvesting an unprecedented 270,000 tons of grapes in 2016. Although vineyard-producing areas in Washington and Idaho experienced sub-zero temperatures this winter, reports of damage are limited. Northwest FCS’ 12-month outlook for the wine-vineyard industry is for continued strong profits.

By Post-Register Staff

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