10-26 FB Wine-Fruit

Michael Stolp is VP-Market Research and Development  at NW Farm Credit Services and Today he finished his his snapshot on agriculture in the Northwest. Wine grape production could break records, where warm weather favors crop production and a successful harvest. Northwest wine producers’ profits are buoyed by concerns over historic low non-producing acres and low bulk wine inventories in California. Wine demand is expected to grow in the U.S. as per capita consumption increases

Northwest tree fruit producers are navigating labor shortages to pick crops. Early optimism around the 2012 Northwest cherry crop faded with a surplus of small cherries as well as rain, hail, and heat damage. Cherry growers with good quality, size, and tonnage will cover costs and some will be profitable. The outlook for the Northwest apple industry is bullish, supported by a small Northern Hemisphere crop. Early season pricing is historically high. Expectations are that the Northwest’s fresh apple crop will exceed expectations and reach 120 to 125 million boxes. A strong market for processor-grade fruit provides apples a price floor. Pear markets are also strong, supported by a smaller crop and strong exports. 

Following significant export market growth for logs in 2011, demand cooled and log prices have fallen. Lumber prices in 2012 have exceeded 2011 levels for much of the year. Lower log prices and higher lumber prices have benefited mills’ operating margins. Low lumber inventories coupled with low operating rates are expected to result in volatile prices until construction and demand return in earnest. Export demand should provide a price floor for West Coast logs.