NW Farm Credit Services Releases Outlook Reports for Row Crops, Tree Fruit and Wheat
Northwest Farm Credit Services, the Northwest's leading agricultural lending cooperative, has released its quarterly Market Snapshot reports that look at the state of major agricultural commodities in the region.
Northwest FCS industry teams working 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 profitability outlook calls for slightly profitable grower returns. Reduced yields in 2017 resulted in lower inventories, which ended the shipping season early for many Northwest onion packers. Onion prices fell slightly through the first quarter of 2018 but remain profitable. Onion packers should be operating new facilities in the fall of 2018 after rebuilding from the January 2017 snow storm.
Growers should see profitable returns as shrinking supplies bolster open potato prices. Early harvested 2018 potatoes will ride the wave of profitability. However, robust seed sales point to a larger potato crop in 2018, which may weigh on prices in the fall.
Slightly profitable returns are predicted for sugar beet growers in the next 12 months. Total domestic sugar use is forecast to increase nearly 2 percent. Favorable weather conditions for processors have resulted in high sucrose-extraction rates and minimal shrink in storage piles. However, increasing imports and production will likely raise ending stocks and limit upside price potential.
Northwest FCS' 12-month profitability outlook calls for slight profits in the apple industry. The 2017-18 crop is currently 135.7 million, 40-pound boxes, making it the second largest crop on record. Shipments are slower than average due to small-sized fruit, a large crop and a later harvest than the last few years. Slow shipments are pressuring prices down. The federal electronic logging device mandate, which requires truckers to use a certified device to monitor hours of service, is elevating trucking costs.
The cherry industry's 12-month profitability outlook is generally split. Early season cherries are anticipated to be profitable while mid- to late-season cherries are expected to operate near breakeven. Mild December and January weather gave way to cooler temperatures in February, likely slowing a potentially early harvest in the Pacific Northwest. However, an early harvest in California is expected. An early California harvest with good quality will favor early season Northwest cherries. However, as more cherries enter the market in the mid- to late-season, prices will compress.
Slight profits are forecast for the pear industry in the next 12 months. The 2017-18 fresh crop is 16.4 million, 44-pound boxes. Production is tied for the lowest on record with the 2004-05 crop and is 13.8 percent smaller than the 10-year average. Prices are strong for good-size and quality fruit. However, prices are low for small-sized fruit, which is in abundance.
The wheat industry may see slight profitability through the next 12 months. While global supplies continue to grow, U.S. wheat production is projected 25 percent lower. Lower production may provide price support into the 2018-19 crop year. The USDA's 2017-18 season-average farm price for all-wheat is projected at $4.60 to $4.70 per bushel, just above the cost of production.
2017 grape tonnage for Oregon, Washington and California is strong. Washington tied the second-largest tonnage on its record with 227,000 tons. Oregon is expected to set a record with early reports coming in at 85,000 to 90,000 tons. California's 4 million tons is similar to last year, down less than 1 percent. Ample supplies have led to excess bulk supply. Although direct-to-consumer sales growth remains strong, growth is expected to plateau and competition remains stiff.
That's your Land and Livestock Report-I'm Russell Nemetz.