Agricultural commodities in Eastern Washington generally will fetch slightly higher prices this year than last, and farmers have had good weather, improved yields, and relatively solid market demand, say those in the industry.


Wheat remains the dominant agricultural product here, despite rising production costs. Dry peas are projected to have a banner year, while lentil prices are expected to be below average. Potatoes are slumping, but cattle farmers are enjoying high demand because of dietary trends away from carbohydrates.


The general view is that were doing relatively well in comparison to other segments of the economy, says Valoria Loveland, director of the Washington state Department of Agriculture. Prices are generally up, and were maintaining our market share.


Wheat production


Based on early projections for this growing seasons soft white wheat crop, growers can expect slightly higher yields and higher prices than the last three seasons. The Washington Agricultural Statistics Service is projecting 66 bushels per acre for soft white wheat this year, up from last year.


We had very good rain in the month of May, and it was a fantastic boost for our spring wheat crop, says Ray Garibay, the agencys director.


As of July 1, Washingtons total wheat production was projected at 134.5 million bushels. Although winter wheat yields are down by about 4 percent, spring wheat yields are up about 24 percent, according to the statistical agency.


Soft white wheat on the Portland grain exchange has been selling recently for just over $4 a bushel, about 20 cents more a bushel than a year earlier.


The market is level, and we can live with that, says Washington Wheat Commission CEO Thomas Mick. Wheat prices going into harvest are stronger than usual, and we hope they will maintain and increase.


Eastern Washington wheat farmers, though, are facing some relatively new competition from countries that in the past have been buyers, Mick says.


India, Pakistan, and a number of the countries that used to belong to the former Soviet Union are producing enough wheat for their own consumption now, and also are selling what they dont need to countries such as China, Japan, Yemen, and Egypt, which have been traditional buyers of Eastern Washington wheat.


Those new players in the market dont use as much fertilizer as Washington growers and have lower labor costs than farmers here, Mick says.


Those countries are able to sell wheat at $60 to $80 a ton under what we sell, he says. We cant compete on the world market (on price) because our production costs are higher. But we can compete on a quality basis. Were able to make a lot of different types of wheat, including blended, which is preferred by millers.


China could import between 5 million and 8 million metric tons of wheat this year, says Mick. China, which produces its own wheat as well, will consume an estimated 80 million to 100 million metric tons of wheat, according to a USDA report.


Mick says international competition for that business is fierce, and it makes the prospects for a significant price jump doubtful.


Wheat production in non-traditional exporters is putting downward pressure on prices, says Mick. I dont see anything turning that around.


Still, there are many unknowns in the global market, including weather and international politics, says the states Loveland.


Wilbur, Wash., wheat grower Jim Walesby says prices are becoming increasing difficult to predict.


Who knows what the markets are going to do, says Walesby. Historically, wheat prices have been in a steady increase, but with non-traditional suppliers that have come into the market, its hard to say. The big wild card in the market is China. It depends on what theyre going to do.


Also, rising soft white wheat prices havent matched increasing fuel, fertilizer, and labor costs, says Walesby. He says that even if he gets about $4 a bushel for his crop this year, it will cost him about 50 cents a bushel to ship his wheat to Portland so it can be sold. The profit thats left will be just enough for him to stay in business, he says.


Many wheat farmers diversify their crops by growing dry peas, grass seed, lentils, and oil beans to survive. Some, however, have now switched back to growing wheat exclusively, says John Burns, an agronomist with Washington State Universitys Cooperative Extension Service.


Winter wheat is a cornerstone crop, says Burns.


Still, there has been a decline in total acreage planted by farmers in Washington over the last four years, says Eric Zakarison, program director for the Washington Wheat Commission.


Weve lost 80,000 acres of planted wheat in the last four years due to the Conservation Reserve Program, he says. Were around 1.8 million acres this year.


The program provides technical and financial assistance to eligible farmers and ranchers to address soil, water, and related natural-resource concerns on their lands in an environmentally beneficial and cost-effective manner, according to the U.S. Department of Agriculture Web site.


Peas and lentils


It looks like a great year for dry peas because of ideal weather conditions this spring, Burns says.


Dry peas currently are selling for about $8.90 per hundredweight, roughly the same price as in 2002. Last year, however, prices were lower at $8.10 per 100 pounds, and the dry pea crop was hurt by drought.


Anything is better than last year, Burns says. This is a real nice change.


Washington farmers planted about 90,000 acres of dry peas this year, up 8 percent from last year. Planted acreage of lentils is about 300,000 this year, up 22 percent from last year, according to the Washington Agricultural Statistics Service.


Lentil prices, meanwhile, are expected to be below average this season because of soft market demand, says Todd Scholz, director of information and research at the Moscow, Idaho-based U.S.A. Dry Pea & Lentil Council.


The market is oversaturated with lentils, he says. Its still early, but it looks that way.


Last year, lentils sold for $17.20 per hundredweight here, according to the Washington Agricultural Statistics Service. Scholz expects that number to be closer to $14 per 100 pounds this year.


Potatoes and cattle


Potato prices are down for the second consecutive year, due in part to the popular low-carbohydrate diets, but also to higher-than-normal production, says Dale Lathim, executive director of the Potato Growers of Washington.


Demand for fresh potatoes is down again, Lathim says. Its going to be another tough year. Hopefully, it will turn around, but right now it doesnt look promising.


Washington growers planted about 160,000 acres of potatoes, which is 3,000 fewer acres than a year ago. Idaho planted 350,000 acres of potatoes, down about 10,000 acres from the previous year.


Non-processed potatoes, which make up about 87 percent of the total potato crop, are expected to sell for about $4.50 per hundredweight this year, down about 50 cents per hundredweight from last year.


On the bright side, demand for processed potatoes, which are used to make french fries, is growing, Lathim says.


Were seeing the demand for our french fries from the Columbia Basin picking up quite well, Lathim says. McDonalds has had some excellent quarters, and its not all salads.


Processed potato prices are generally locked in by annual contracts, and will be about $4.50 per 100 pounds, about the same as last year, he says.


The state of Washington says the cattle industry is struggling with the loss of about 30 percent of the industrys exports to Asia due to concerns over bovine spongiform encephalopathy, or mad cow disease, Loveland says.


Were hoping we can start to export beef again, she says. It has hurt us.


But those in the industry believe its a great time to be a cattle rancher.


Domestic demand has been incredibly strong, says Patti Brumbach, executive director of the Washington state Beef Commission.


Our cattle prices are as high as they have been in 20 years. Its a combination of a tight supply and strong consumer demand.


There are more than 90,000 cattle producers in Washington.


Nationally, cattle numbers have dipped because of drought conditions in the Midwest, she says.


The market is full of ebbs and flows, Brumbach says. Its the very nature of cattle farming. Were coming out of a 10-year cycle where we had more supply. The market is correcting itself.