Brett Steelhammer tosses a bale of hay from one truck to another on Wednesday, June 28, 2017, at his family's farm in Galvin.
An agricultural commodity report released Oct. 5 by Northwest Farm Credit Services shows that most producers across the region have been experiencing times of plenty over the last quarter of the year. Markets vary widely by commodity, but fisheries, forest products and the wine market have all been particularly profitable while wheat growers have been hampered by imported grain stocks.
The beef market is flexing its muscle as strong animal profits have been prodded along by steady demand and expanding export opportunities. Fall market calves are expected to fetch a pretty penny.
Labor issues are preventing the dairy industry from being the bellcow of the agricultural market that dairymen wish it could be. Currently, dairy producers are operating with thin margins right around the break-even point. What’s more, between July and August, herd growth across the U.S. paused for the first time in a year. However, producers are holding onto hope that the cream will ultimately rise since the USDA has forecast an all-milk price between $17.70 and $17.90 for the rest of the year.
Holy mackerel! Strong demand continues to buoy prices in most fish markets, particularly for cod, halibut, sablefish, salmon and all of the Amendment 80 species, which includes Atka mackerel, Aleutian Islands Pacific ocean perch, Pacific cod, and flathead, rock and yellowfin sole. Even the lowly pollock, the mystery white fish du jour, has been netting a decent return after years of reeling prices.
The lumber market has continued to grow like alders on the riverbank. That profitability can be attributed to demand that’s proven to be strong as oak and knotty disruptions in supply from the great white north caused by the Softwood Lumber Agreement between the U.S. and Canada. Like maple syrup in the springtime, those warm economic conditions have trickled down to fill the coffers of timberland owners and mill operators. While some woodsmen and truckers who move the logs around are staying busy trying to keep up with demand, others have been displaced by wildfires in the Northwest and British Columbia. Those charred acres will mean a continued shortage of supply while demand from a stable housing market should keep prices high.
Hay producers are starting to see green again as low supply and typically high-quality crops are driving prices as high as the weather vane. Supply is expected to dwindle more rapidly as winter conditions begin to take hold and prices are expected to rise as temperatures fall. Over the first seven months of 2017, the U.S. hay export volume increased by 25 percent.
Strong demand and limited supply have kept the nursery and greenhouse market insulated from dips in profitability. Greenhouse operations are expected to keep growing thanks to higher median household income positive consumer sentiment and steady housing demand. Like other agriculture industries labor constraints continue to restrain the ability for growers to expand production.
Onion growers with good stock will have nothing to cry over this year. The market is predicted to remain profitable into the future due to questions of overall yields and quality. Returns have been strong so far this fall as the harvest has been able to keep pace with a strong demand and prices are expected to rise heading into winter.
Spud mongers are keeping their eyes peeled for deep-pocketed customers as prices are expected to fetch a profitable return throughout the season. The market for uncontracted potatoes is expected to get mashed up a bit during harvest season but prices are projected to be good as gravy later in the season. Growers have reported average yields on early crops despite wet spring conditions that delayed first plantings. The USDA has reported Idaho potato farmers planted 4.6 fewer acres of tubers this year.
Producers are hoping that a moderately profitably sugar beet market will sweeten up later in the season. Right now, returns are making for slight profits but unpredictability in production in the southeast U.S. due to hurricanes Irma and Harvey could drive prices up later on. Cool weather beginning at the end of September has helped drive up sugar concentration in the region.
Apple growers should all be able to get a nice sized piece of the pie this year, particularly in Washington where the crop is expected to be the third largest on record. Other regions are experiencing a dip in output, which should help drive demand domestically. Exports are also expected to increase this year due to a weaker U.S. dollar.
This year’s Northwest cherry harvest was a record with 27 million 20-pound boxes taken off the fields. Profits for cherries sold before the Fourth of July were strong but there was no cherry on top for persistent producers of the sweet summer favorite. Small fruit size and quality issues have depressed the marketability of those late season crops and many blocks of small, undesirable cherries were left on the tree during the peak of the picking season.
The pear market has turned to mush and profit margins are projected to be slim this season. While the overall Northwest crop is expected to be up 2.3 percent from last year, harvest levels are still below historic levels. Bosc pear production in particular dropped 19 percent from last year due to a light bloom with acute ramifications in the Yakima area. The low supply has kept prices from dropping like rotten fruit but the small crops are expected to undercut overall returns.
Wheat growers are hoping not to wind up underwater as prices remain depressed in the face of wavering crop conditions. Drought conditions have plagued growers across the region but eastern Montana was hit the hardest. The USDA forecast for all-wheat prices in 2017-18 is predicted to be somewhere between $4.30 and $4.90 per bushel.
Vintners in Washington, Oregon and Idaho are expected to experience slightly reduced yields but steadily increasing profits on wine in the barrel is projected to keep the industry afloat. Total U.S. wine sales are up six percent over last year so far and direct-to-consumer marketing channels have helped spur an 18-percent increase in sales over last year.
Northwest FCS is an $11 billion financial cooperative providing financing and related services to farmers, ranchers, agribusinesses, commercial fishermen, timber producers, rural homeowners and crop insurance customers in Montana, Idaho, Oregon, Washington and Alaska. Northwest FCS is a member of the nationwide Farm Credit System that supports agriculture and rural communities with credit and financial services. Additional information about Northwest FCS can be found online at northwestfcs.com.
