April 04, 2019
FOR IMMEDIATE RELEASE
Varied outlook continues in 2019 for Northwest agricultural producers
SPOKANE, Wash. (April 4, 2019) – Northwest Farm Credit Services, the Northwest’s leading agricultural lending cooperative, has released its quarterly Market Snapshot reports that look at the state of major agricultural commodities in the region. Northwest FCS industry teams working throughout Idaho, Montana, Oregon and Washington monitor conditions and report outlooks for commodities financed by the co-op.
All Market Snapshots are posted online at Industry Insights.
Northwest FCS’ 12-month outlook for the agricultural commodities most common in the Northwest are summarized below.
Cattle – Northwest FCS foresees slightly profitable results throughout the beef industry as foreign demand increases. However, record cattle on feed inventory is expected to pressure feeder cattle prices and feeder margins lower. Dairies breeding with cheaper beef semen will add headwinds to producer profitability.
Dairy – Futures markets suggest unprofitable prices through the first half of the year. Higher prices in the latter half are expected to offset first-half losses. Northwest FCS anticipates break-even returns for dairy in 2019.
Fisheries – Fisheries should realize profitable returns over the next 12 months, according to Northwest FCS. Healthy biomass for halibut and sablefish means higher harvest levels. Demand for pollock is strong, and so are prices. Bristol Bay sockeye salmon should see another highly profitable year.
Forest Products – Log and lumber prices are expected to increase slightly and remain stable throughout 2019. Northwest FCS anticipates profitable returns for timberland owners and slightly weaker margins for processors over the next 12 months, even with price declines from record log and lumber prices in 2018.
Hay – Northwest FCS’ 12-month outlook suggests alfalfa and timothy hay producers will be profitable. Low supplies across the Northwest are setting the stage for strong profitability in 2019.
Nursery/Greenhouse – Although inventory growth will limit price increases for nursery and greenhouse operators, prices remain strong. However, some indicators point to a softer housing market, which could affect demand. Northwest FCS expects nursery and greenhouse operations will be profitable in 2019.
Onions – Northwest FCS foresees profitable returns to onion producers in the next 12 months. Wet weather in February and March provided ample water for the 2019 growing season, but delayed planting.
Potatoes – Contracted potatoes should be profitable, and uncontracted potatoes are projected to be slightly profitable. Delayed planting foreshadows a smaller crop in 2019. Northwest FCS anticipates lower production and inventory favor higher prices.
Sugar Beets – Northwest FCS predicts profitable returns to sugar beet growers for the 2018-19 crop. Northwest sugar beet producers should benefit from lower ending stocks.
Apples – Northwest FCS expects slightly profitable returns over the next 12 months for apple producers. Prices have increased, and producers anticipate modest returns for the remaining 2018-19 crop. With no trade resolutions in sight and more fruit expected, next season’s margins could be thin.
Cherries – Cherry growers could see compressed returns if Chinese tariffs remain in place for the 2019 season. Northwest FCS predicts early and late season cherries will capture higher returns due to lower supply. However, supply gluts are anticipated mid-season, which will subdue producer returns.
Pears – Lackluster consumer demand leads to Northwest FCS’ 12-month outlook of slight profits. Subdued shipments result in soft pricing despite high quality. Labor and disease management continue to increase costs.
Wheat – USDA projects the 2018-19 all-wheat price will be between $5.10 and $5.20 per bushel. Northwest FCS predicts this price should allow slightly profitable returns for producers.
Wine/Vineyard – Northwest FCS’ 12-month outlook calls for profitable wineries and slightly profitable vineyards. As more consumers reduce their alcohol consumption and turn to substitute beverages, growth in wine consumption is slowing. Still, consumers continue to trade quantity for quality, which is increasing the value of wine sales. Increased labor costs and abundant grape supplies challenge the vineyard industry.
About Northwest Farm Credit Services
Northwest FCS is a $12 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 reliable, consistent credit and financial services. For more information, go to northwestfcs.com.
NOTE: Brief audio highlights are available for each commodity listed above.
Deb Strohmaier, Communications Specialist