October 2, 2019

Northwest FCS News


Same song, third verse: 2019 outlook for Northwest agricultural producers remains varied


SPOKANE, Wash. (Oct. 3, 2019) – Northwest Farm Credit Services, the Northwest’s leading agricultural lending cooperative, has released its quarterly Market Snapshot reports covering the state of major agricultural commodities in the region. Northwest FCS industry teams 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 forecasts slightly profitable returns throughout the beef industry. Growing packer margins support a very profitable year while cattle feeders are expected to remain slightly profitable despite current negative margins. Producers still face uncertain calf prices that may limit profitability. 

Dairy – Dairies anticipate slightly profitable returns in 2019 and 2020 according to Northwest FCS’ forecast. Futures markets suggest Class III and Class IV milk prices will increase for the remainder of 2019. Increased attention to managing feed costs will benefit dairy producers in the 2019-20 crop year. 

Fisheries – Northwest Farm Credit foresees profitable returns for fisheries in the next 12 months. Bristol Bay sockeye experienced another outstanding year. Pollock pricing remains strong buoyed by solid demand. Warm water off the West Coast resembles the warm water blob from 2014-15, which had devastating effects on western marine life.

Forest Products – Timberland owners should be profitable and mill operators slightly profitable according to Northwest FCS’ outlook. A mild fire season meant summer logging was not interrupted and now log supplies are ample. Increased log supplies are helping mills manage low lumber prices. As building season wraps up, housing starts are around 1.25 million, below many projections of around 1.3 million.

Hay – Northwest FCS suggests that in the next 12 months, alfalfa will be profitable given tighter supplies and timothy slightly profitable due to an abundance of middle-grade hay inventory. Supplies of high-quality hay are limited.

Nursery/Greenhouse – Northwest Farm Credit expects nursery and greenhouse producers to remain profitable due to strong sales. The industry’s supply and demand appear to be in balance as carry-over inventories are limited. Increasing labor and input costs could soften revenues from increased gross sales.

Row Crops

Onions – Onion growers may receive slightly profitable returns in the next 12 months according to Northwest FCS’ outlook. Yields in Washington and the Treasure Valley are expected to be down as much as 30% due to the late planting this spring. Growing conditions in Washington were favorable, producing a high-quality crop that will likely store well. Treasure Valley early onions have some quality issues, but later harvested onions appear to be good quality. 

Potatoes – Northwest FCS’ 12-month outlook is profitable for contracted potatoes and slightly profitable to profitable for uncontracted potatoes. Harvest has started in the Columbia Basin and Idaho with early indications of a smaller crop than in 2018. Producers with early market potatoes of large size will be able to take advantage of higher grower returns. 

Sugar Beets – Most sugar beet producers could see profitable returns, per Northwest FCS’ forecast. Isolated weather events hindered production in Montana. This comes as the USDA projects a lower sugar stocks-to-use ratio. Lower supply is favorable to sugar prices and producer profitability.

Tree Fruit

Apples – Northwest Farm Credit anticipates apple growers will see slightly profitable returns. Estimates call for a larger crop, which could pressure prices. Although trade tensions have eased with some countries, growers will be challenged to find enough markets, especially for older strains and varieties. 

Cherries – Cherry growers should see profitable returns from early and late season cherries while mid-season cherries are expected to return slight profits, according to Northwest Farm Credit’s outlook. The decreased California crop opened the market for early Northwest cherries. As is typical, increased supplies in mid-season depressed pricing. 

Pears – Northwest Farm Credit foresees slight profits for pear growers in the next 12 months. The official crop estimate says production will be similar to last season’s. However, reports from the northern Washington growing region indicate the crop is smaller than estimated. Although the pear industry is working hard to improve consumer demand, solutions may take a few years to achieve success. Therefore, soft prices are expected again this year. 

Wheat – Northwest Farm Credit’s 12-month outlook calls for break-even returns to wheat producers. Strong global stocks continue to weigh on grain prices. Rotational crop returns are below breakeven and yields are varied significantly across the Northwest.  

Wine/Vineyard – Northwest FCS’ 12-month outlook indicates slight profits for vineyards while winery returns are expected to be slightly profitable. New products and younger consumer groups present opportunities despite the larger trend of slowing alcohol consumption. High grape supplies continue to challenge vineyards, especially growers with uncontracted acreage. 

About Northwest FCS 

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