4-30 IAT Hay and Wheat

 Michael Stolp is vice president of market research and development for Northwest Farm Credit Services. Today he talks about the Northwest outlook for hay and for wheat. 

“Hay -- Hay supplies in the Northwest are tight. Prices remain profitable ahead of the new crop year, but weakness in the dairy market and softening corn prices are pressuring alfalfa prices lower. Until milk prices return to more profitable levels, hay price increases will be limited. Hay growers expect to remain profitable in 2013. Low hay supplies will help establish a price floor for new crop hay. West Coast hay exports are positioned for additional growth given bullish prospects for Chinese and Middle Eastern markets. Looming concerns for Northwest exporters include the impact of the weakening Yen on Japanese hay demand, and non-competitive shipping costs via Northwest ports.

Wheat -- Northwest wheat producers are favorably positioned entering spring. Growers’ financial condition is good, bolstered by favorable prices and crops in 2012. Fieldwork is underway. Northwest growers report adequate spring rains and/or soil moisture, except for select areas of Montana and Oregon. Market fundamentals are somewhat bearish, with 2013 planting intentions and grain stocks higher than expected. However, crop insurance guarantees are positive. Approved guarantee prices are $8.44 per bushel for spring wheat and $8.79 for winter wheat in Montana. In Washington, Idaho and Oregon, guarantees are $7.37 per bushel for spring wheat and $8.40 for winter wheat.