Northwest Farm Credit Services has posted second-quarter net income of $25.6 million, compared with $34.9 million in the year-earlier period.


In the second quarter of 2006, however, the Spokane-based, federally chartered ag-lending cooperatives net income was boosted when Northwest Farm Credit moved to after-tax income $10 million it had set aside previously as part of its allowance for loan losses. That allowance, maintained as a long-term reserve to cover potential future losses, is adjusted frequently after close analysis, President and CEO Jay Penick says.


Through the first six months this year, when it added $1.5 million to its allowance for loan losses, Northwest Farm Credit recorded net income of $52.2 million, compared with $60 million in the year-earlier period.


Meanwhile, the cooperatives net loans climbed to $6 billion as of June 30, up from just under $5.4 billion a year earlier.


Our association continues to have strong loan-volume growth, Penick says.


The cooperatives assets increased to $6.4 billion as of June 30, up from $5.8 billion a year earlier.


Penick says things generally look good for agriculture in the region.


Pacific Northwest agriculture is experiencing, for the most part, positive harvest outlooks, he says. Above average commodity prices in the small grains, hay, livestock, and dairy industries will help producers to offset high input costs this year. The small-grains category includes wheat, by far the Inland Northwests biggest crop; input costs include expenses for fertilizer and fuel.


Non-accrual loans, or loans on which Northwest Farm Credit isnt earning interest, were at 0.47 percent of the cooperatives loan portfolio as of June 30, down from 0.83 percent a year earlier.


Northwest Farm Credit serves almost 13,000 farmers, ranchers, agribusinesses, commercial fishermen, timber producers, rural homeowners, and crop insurance customers in Washington, Oregon, Idaho, Montana, and Alaska and has 45 offices.