Things have gone far better down on the farm so far this year than many observers expected earlier, judging by the most recent quarterly report from Northwest Farm Credit Services, the big federally chartered, Spokane-based ag lending cooperative.


The cooperative, which provides financing and other services to farmers, agribusinesses, and others across a five-state region, earlier this month reported second-quarter net income of $24.1 million, up from $20 million in the year-earlier quarter.


President and CEO Jay Penick says the cooperatives second-quarter earnings beat projections by about 8 percent.


There was concern this winter with the limited snowfall. However, with the abundant spring rains, most of our producers throughout the region received sufficient water to complete the crop year, Penick says. Around the Pacific Northwest, grain harvest has begun, and reports have been relatively positive.


Those reports have come both from such non-irrigated grain-growing areas as the Palouse and Lincoln County, Washington, and areas of irrigated farming, where the persistent spring rains enabled farmers to skip irrigation at times and conserve water, Penick says. He says the early reports have indicated that wheat yields have been good.


Because Farm Credit Services reach is so broadit has 12,000 members and more than 40 offices in Washington, Oregon, Idaho, Montana, and Alaskathe big lenders financial results are watched as an indicator of the health of the regions farm economy.


Penick says the institution is seeing some improvement in the Pacific Northwests potato industry, which has been plagued by poor markets.


Fresh market potato acreage has been reduced for the 2005 harvest, and producers are hopeful 2005 crop prices will rebound to a profitable level, he says. There are positive signs as we move into a new crop year that prices will improve, Penick adds.


As of the end of the second quarter, Farm Credit Services total assets were almost $5.1 billion, up from $4.7 billion a year earlier, and net loans had climbed to just under $4.7 billion from about $4.4 billion. Non-accrual loans, or problematical loans on which the institution isnt earning interest, were at 1.16 percent of its loan portfolio, up from 1.1 percent a year earlier.