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LOOKING UP: The latest market report from Northwest Farm Credit has some good news for several commodities.

Outlook cautiously optimistic for the Northwest

Northwest Farm Credit Services issues its latest quarterly Market Snapshot.

A look at commodity performance in the latest Market Snapshot from Northwest Farm Credit Services holds some good news for many farmers. The outlook, which varies by commodity, shows a majority of producers seeing an uptick in potential profit. Tough spring weather may have created delays, but there is good news for forest products, nursery/greenhouse and wine/vineyard segments.

What follows is the Northwest FCS report in detail:

Cattle. Cattle producers are expected to be slightly profitable in 2017. A short-term supply shortage drove prices for all classes of cattle higher during the first half of the year. An influx of slaughter cattle later in the summer is expected to drive prices lower than a year ago. Global markets for beef are positive, with double-digit, year-over-year growth and recent access to China’s $2.5 billion market. Overall, cattle producers are expected to be slightly profitable for the next year.

Dairy. Lower milk production and weak prices strained producer profitability in the first quarter of 2017. However, Northwest dairy farmers are beginning to return to profitability, as warmer seasonal weather returns dairies to normal operation. Feed inventory remains abundant despite the harsh winter. The Northwest FCS 12-month outlook is for slightly profitable returns as milk prices increase. The USDA’s forecast supports slight optimism, projecting an all-milk price between $17.80 and $18.40 per hundredweight in 2017.

Fisheries. Consumers continue to drive demand and prices higher for most seafood, especially for higher-end species such as salmon and halibut. Pollock is one fishery not benefiting from higher demand; the fishery is also struggling with large inventories, which is dampening prices. Other challenges include small shrimp sizes and the smallest run of Klamath River fall chinook ever recorded.

Forest products. In the forest products industry, the U.S. Department of Commerce announced preliminary antidumping duties at slightly less than 7%. Countervailing and antidumping duties combined put a 27% duty on Canadian lumber, which has contributed to high lumber prices. However, since peaking in April, lumber prices have softened somewhat. High prices and strong demand for lumber are supporting elevated log prices, resulting in good profit levels for timberlands and mills. Drier weather has allowed better access to timberlands, and mills are replenishing log yards.

Hay. Hay inventories have decreased since 2016, but remain above the 10-year average. Export markets rose in the first four months of 2017, increasing 21%. Drought conditions in eastern Montana will tighten supplies and raise prices in the area. Alfalfa prices have remained depressed, leaving only slight profit margins for growers. Tight supplies of timothy have strengthened prices. The Northwest FCS 12-month outlook is for slightly profitable returns for alfalfa growers and very profitable returns for timothy growers.

Nursery/greenhouse. Wet conditions and limited access to labor at nurseries and greenhouses have dampened sales growth. However, the industry still grew sales by almost 4% compared to last year. Sales growth is expected to continue into the 2018 shipping season, but inventory availability will determine how much growth is achievable. The nursery/greenhouse sector is profitable due to strong demand and prices.

Row crops. This category includes onions, potatoes and sugarbeets. Cooler weather has delayed and reduced the length of the onion growing season, which could dampen yields and quality. The National Onion Association’s April report indicates mixed to low demand for much of the second quarter. Grower returns are projected above breakeven; prices may improve with overall lower production and favorable marketing conditions. However, this depends highly on weather trends for the remainder of the growing season. The Northwest FCS 12-month outlook is for slightly profitable returns for onion producers.

For potatoes, low supplies of high-quality, fresh-packed potatoes are pushing up prices. The cool, wet spring will likely lead to lower yields for early-dug potatoes. However, potatoes harvested later in the season may recover, should warmer temperatures arise in July and August. Contracted potato growers continue to see slight profitability. Uncontracted growers are likely to remain at below breakeven levels.

Sugarbeet planting was delayed up to three weeks due to precipitation, which could affect yields. U.S. and Mexico trade talks may lead to changes in Mexican imports and benefit domestic sugar prices. Sugarbeet growers look forward to modest profitability for the 2017 crop year despite weather delays in many areas.

Small grains. Wheat acres are the lowest ever recorded by the USDA. Dry conditions in June followed the wet spring planting season across the Northwest. Early-planted spring crops fared well, taking advantage of available moisture. Conversely, late-planted spring crops have been challenged by above-average temperatures and drying conditions. Low prices and variable crop conditions are leaving many growers below breakeven.

Tree fruit. This category includes apples, cherries and pears. Apple packouts for 2016 are being affected by quality issues in storage. However, prices in general are increasing slightly. Reds, Galas and other less domestically desirable varieties are finding relief in the export markets. The industry anticipates that the 2016 crop will clean up before the 2017 harvest. The apple industry is profitable due to favorable prices for new varieties and a strong export market.

For cherries, California’s record-size, good-quality crop created a smooth transition to the Northwest crop, which is estimated at a record 24.5 million, 20-pound boxes. Due to the cold spring, the peak of the season is later than the typical Fourth of July holiday. Wind, hail and rain can cause quality issues for cherries; although storms have occurred in areas across the Northwest, no significant damage has been reported.

For pears, the percent of the 2016 pear crop shipped to date is lower than the last five years due to weakened exports and lower domestic demand. The 2017 crop is estimated at 17.6 million, 40-pound boxes, which is smaller than the 2016 crop. The Bosc pear crop in particular is expected to be very small due to bloom issues. This may positively impact demand for other varieties. Overall, good quality for the 2016 crop has kept producers profitable. 

Wine/vineyard. A cold, wet winter and spring are pushing the wine/vineyard industry back to normal growing conditions, compared to recent years. Although some producers were subject to freeze and other winter damage in the vineyard, the broader wine industry outlook is positive entering the summer growing season. The wine industry is strong, with sales growth of 3% year over year, and the direct-to-consumer segment is still cranking out double-digit sales growth. 

Northwest FCS serves Montana, Idaho, Oregon, Washington and Alaska. For more information, visit

Source: Northwest Farm Credit Services

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