Many Northwest Ag Producers Are Cautiously Optimistic

Published online: Oct 11, 2010 Northwest Farm Credit Services
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Spokane, Wash. - Agricultural industries dependent on consumers' discretionary income continue to face significant challenges due to the struggling U.S. and global economies. Crop producers are cautiously optimistic, with strong prices prevailing as harvest is either beginning or ending. The following highlights depict the general health of select industries included in Northwest FCS Knowledge Center Market Snapshots, which are available at Beef: The economy continues to dampen consumers' demand for beef. A bright spot for cow-calf producers is strong calf prices throughout 2010. Calf prices have been approximately $15 per hundred weight higher than in 2009. Prices are expected to remain strong through year end and into 2011. Wheat: The ample moisture received in the spring contributed to above average yields for most wheat growers in Washington, Oregon, Idaho, and Montana. Additional precipitation received in September was viewed as either a blessing or a curse as it proved good for fall seeding, but problematic if wheat was unharvested. Facing increasing fuel and fertilizer prices, wheat producers' breakeven prices will increase in 2011. Dairy: Dairy producers' guarded optimism around increasing milk prices is met with careful watch of increasing feed prices; namely corn. Rising milk prices throughout 2010 have improved dairy producers' margins. Most dairies are currently producing above breakeven levels. Hay: Hay supplies are tight across the Pacific Northwest. Cool, wet weather that hindered crop growth and harvest this spring continued to vex hay producers through the summer. In Washington and areas of Idaho, the quality of most cuttings of alfalfa was reduced by untimely rains. As a result, hay prices in the Northwest are buoyed by the lack of high quality hay in the market. Upward pressure on prices is expected as the production year closes. Forest Products: The up-tick in lumber and panel prices during the first half of 2010 was short-lived as restocking activity throughout the supply chain waned. In addition to dismal new home construction numbers, commercial construction activity was off during the third quarter. Mill curtailments are expected to hold prices above their 2009 bottom for the remainder of the year. Sugarbeets: Sugarbeet harvest has begun in the Northwest. Early reports from Southern Idaho show good stands, but lower yields and smaller sugar beets. Globally, weather-related challenges to sugar production have increased sugar prices through August and September. Increasing sugar prices offset sharp price declines earlier this spring. Onions: Northwest onion producers are optimistic as the 2010 harvest begins. They are experiencing lower yields, but stronger prices. Knowledge Center quarterly Market Snapshots include information on 18 industries and periodic special reports. For more information, go to