Quarterly Snapshot

Quarterly Snapshot. I’m Greg Martin with today’s Line On Agriculture.

Every quarter of the year the folks at Northwest Farm Credit Services take a snapshot of the ag industry to get an idea about how things are progressing. The overall picture looks at things like dairy, wheat, apples, wine, potatoes and more. Michael Stolp, Vice President of Market Research and Development for Farm Credit has the report.

STOLP: As we look at the northwest, really, weather has been the determining factor in whether or not markets are bullish or bearish. Let’s start with beef cattle. Cattle prices remain at historic levels due to reduced numbers and strong global demand. In fact auction results for the northwest reveal feeder cattle prices have increased 30% year over year. Profitability remains positive for cow/calf and stock operations. Feedlot operations though have compressed margins challenged by those high feeder cattle prices and volatility.

He says the dry conditions in the south are pushing the cattle numbers lower.

STOLP: In the dairy market, northwest producers continue to face low milk prices and high feed supplies and costs. Average milk prices in Idaho are forecast in the mid $16 dollars per hundred weight for the remainder of the year while in Washington those prices are around the mid to high $15 dollars per hundred weight. This compares to break even prices that are approximately $17 dollars per hundred weight in Southern Idaho and $17.25 to $18.25 in Washington.

He takes a look at the potato market.

STOLP: Growers optimism has started to fade and this isn’t necessarily due to more acres of potatoes but it’s due to near ideal growing conditions upon which growers in the industry expect strong supplies of potatoes in the 2012 and 13 marketing year. Similarly, sugar beet crops should be good. Domestic sugar beet prices have weakened in 2012. Never-the-less tight stock to ratios both domestically and globally should support U.S. sugar prices at profitable levels through 2012 and 13.

And a quick look at apples.

STOLP: The 2012-13 northwest fresh apple crop was pegged at 125-million boxes. That’s big. Normally a crop of that size would be bearish for apple prices in the northwest. However, we saw tough weather in the midwest and eastern U.S. that devastated crops in Michigan where the crop is down 87% and in New York where the crop is down 45 to 50%. Finding labor to pick apples might be tough as growers move in to the fall.

That’s today’s Line On Agriculture. I’m Greg Martin on the Ag Information Network.