Agricultural industry observers here say there's a bit of trepidation in the air concerning 2009, following a year that saw both prices and yields drop for wheat, dried peas, lentils, and chickpeas, all among the Inland Northwest's primary crops.

Yields will be especially important to growers here in 2009, after a disappointing season this year, says Jay Penick, president and CEO of Spokane-based ag lender Northwest Farm Credit Services.

"We need a good crop in 2009, because prices will be back to normal," Penick says.

Observers' predictions last year that prices and demand would remain high as world supplies began to rebound weren't realized.

Wheat prices this year fell to about $5 a bushel from 2007's extraordinary high of $15, says Tom Mick, chief executive officer of the Washington Grain Alliance, based in Spokane.

Making the falling prices even worse, the wheat harvest in Washington totaled between 115 million and 117 million bushels this year, well below the five-year average of 140 million bushels, due to untimely rains, among other things, Mick says. For the coming year, the forecast is for a very dry year in most of the state, which could hurt 2009 yields, he says.

"Wheat is a remarkable weed, as we say, but as it stands right now, the conditions aren't good," Mick says.

Adding to the challenge, he says competition is stiffer now, as international competitors have stepped up production due to the high price of wheat in 2007.

"Right now the world is swimming in wheat," he says.

Also because of that earlier price surge, many farmers who had accepted prices for part of their crops early in 2007 on the futures market, before prices rose dramatically, held out this year when prices were about $8 a bushel, only to see them fall off, Mick says.

"Prices are below the cost of production for farmers right now," Mick says. Despite a recent drop in some planting costs, such as for fertilizer, overall costs remain high, keeping pressure on growers, he says.

Penick says lower fuel costs, however, should help farmers here. Still, growers' ability to get credit will be determined by whether they can be profitable given the challenges with yields and prices, he says.

Meanwhile, how growers feel about their prospects with wheat will influence the planting of legume crops, or dried peas, lentils, and chickpeas, which often are planted in rotation with grain crops, says Tim McGreevy, executive director of the U.S.A. Dry Pea and Lentil Council, based in Moscow, Idaho. Overall, McGreevy says he doesn't expect to see huge shifts in the amount of pea, lentil, and chickpea production next year, following a decline in acreage devoted to lentils and chickpeas for the 2008 growing season.

He says how much is planted and how much is sold will depend a lot on the economy.

"A lot of producers are just waiting, looking to see some stability," McGreevy says, adding that it's the same with buyers, who often wait to buy when prices are falling.

With lower wheat prices, he says, the likelihood rises that more acres of peas, lentils, and chickpeas will be planted next year. Prices for legumes haven't dropped as dramatically as wheat prices.

McGreevy says the U.S. dollar's rise against the Canadian dollar had a big impact in the latter part of 2008, giving Canadian growers a competitive edge even as the economic crisis put a lid on prices. Adding to the problem, yields in Washington and Idaho dropped between 22 percent and 30 percent in 2008, McGreevy says.