Washington state agriculture experienced mixed results in 2025 amid broader economic uncertainty and industry headwinds, says Sonja Jensen, Washington state president at Spokane-based AgWest Farm Credit.

Although expectations for lower interest rates didn’t materialize in 2025, Jensen anticipates a modest easing of interest rates in 2026 that would positively impact producers.

“When you look at Washington state, there are over 200 crops grown here all with individual drivers and each crop with its own set of complexities and uniqueness,” Jensen says.

A survey by the lending cooperative found that only 52% of agricultural borrowers are expected to be profitable in 2025. Looking ahead at 2026, fewer than half of producers are expected to break even. Consequently, lenders anticipate a rise in farm debt fueled by tighter working capital and increased dependence on credit.

Loan growth in Washington's agricultural sector has been slow due to challenges in the primary industries it serves, says Jensen. However, looking to 2026, she anticipates AgWest will experience positive and sustainable loan growth.

“Producers continued to respond to a dynamic economic environment with rising input costs, changes in consumer demand, declining commodity prices, and labor-related challenges,” Jensen says. “We see our customers continuing to proactively adapt to these challenges and find innovative ways to enhance operational efficiencies.”

Washington crops did well this past season, but not without challenges.

Storage reports for Washington’s number one crop, apples, showed crop size of 131.5 million 40-pound boxes, down from an initial forecast of 142 million 40-pound boxes, says Jennie Strong, international marketing specialist for the Wenatchee, Washington-based Washington Apple Commission.

“Despite a summer heat wave, overall quality is excellent,” Strong says. “The heat wave is partially responsible for this (crop) drop. However, this number still reflects a healthy season and strong market potential.”

Strong says the organization anticipates a stable crop in 2026 with continued emphasis on premium varieties and managed volumes to maintain high quality. 

The Cosmic Crisp apple, developed by Washington State University specifically for Eastern Washington’s growing conditions, continues its meteoric rise in popularity five years after its introduction in 2020, becoming one of the top five apple varieties in Washington for the first time, the Washington State Tree Fruit Association reports.

Cosmic Crisp joins the top ranks alongside Gala apples, Honeycrisp, Granny Smith, and Red Delicious, the report states. 

According to AgWest’s Monthly Market Update for December, while apple production was lower than initially anticipated, it is still a large crop production by historical standards. However, anecdotal reports indicate that more quality issues are occurring than are typical for early-season varietals, due to excessive summer heat, particularly with varietals like Honeycrisp and Gala apples that are grown in northern regions. According to the cooperatives' 12-month outlook, apple producers are expected to have an unprofitable year, while apple packers are expected to have a profitable year.

Washington wheat production in 2025 has been marked by trade and tariff barriers impacting the crop.

According to the Washington Grain Commission, at the start of the year, the agency was closely monitoring announcements regarding tariffs. Washington is one of the nation’s leading wheat exporters, with over 90% of its crop exported each year.

A 2025 State Agriculture Overview published by the U.S. Department of Agriculture indicates that wheat production in Washington accounted for 141.5 million bushels, down from 143.5 million bushels reported in 2024.

Other crops experiencing impacts from tariffs and trade negotiations include the beef and cattle industry, according to AgWest’s report.

Cattle markets were unusually volatile this year, with calf prices peaking early in the year before falling about 9% in November as traders reacted to potential border reopenings and tariff shifts. Prices remain high, but producers face rising costs and tighter cattle supplies, leaving packers operating at only 76% capacity and prompting potential plant closures.

Retail beef prices have climbed sharply, and exports have fallen 10% amid steep, shifting tariffs, especially on China, the report states. Lower tariffs on Brazilian beef and higher duties on New Zealand and Australia are likely to reshape import flows. In 2026, continued tight supplies, strong prices, and ongoing trade uncertainty are expected.