7-31 IAT Wheat and Potatoes

 Michael Stolp is V.P. Market Research and Development for Northwest Farm Credit Services is a genius at market analysis in the ag sector and was kind enough to provide us with his 2nd quarter Market Snapshots. Yesterday we talked about spring rain and beef. Today he talks to us about wheat and spuds.

Wheat -- Most Northwest wheat producers benefitted from May and June rains. Montana received up to 10 inches of precipitation, boosting yield expectations above average. Precipitation deficits in Washington and Northern Idaho were stabilized with mid- and late-June rains, supporting an outlook for average yields. Growers in North Central and Northeastern Oregon continue to face dry conditions and the prospect of below average yields. Growers are likely to find a weaker market than last year. Although world wheat ending stocks are only forecast up slightly in 2013/14, a large corn crop may drive feed grain and wheat prices lower. The USDA projects the season-average farm price for all wheat between $6.25 and $7.55 per bushel; down from the record $7.80 per bushel projected for 2012/13. Northwest FCS estimates wheat producers’ break-even price between $6.50 and $7.00 per bushel.

Potatoes – The Northwest’s open potato market rebounded in May and June, with prices rising from $2 to $5 per cwt. to $6 to $8 per cwt. Reasons for the price rally include reduced packouts, delayed planting of early market 2013 potatoes, and acreage reductions for the 2013 potato crop. Northwest breakeven prices are estimated between $5 and $7 per cwt. Weather conditions are critical for the 2013 Northwest potato crop and market outlook. High summer temperatures coupled with limited availability of irrigation water in Idaho could stress crops and reduce 2013 potato production. Improved growing conditions could strengthen yields and increase production, resulting in decreased prices.