Spokane Journal of Business

Drought, heat trigger early wheat harvest

Apples and cherries hurt; beef likely to be profitable

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Northwest wheat growers are harvesting two to three weeks earlier than normal, due to recent drought and extreme heat conditions, says an agricultural outlook report from the Spokane-based Northwest Farm Credit Services. 

Typical harvesting times vary throughout the state, says Michael Stolp, vice president of market research and development for Northwest FCS. 

The U.S. Department of Agriculture predicts a national 2015-16 season average price of $4.75 to 5.75 per bushel. In addition, large global wheat supplies suggest the price-per-bushel most likely won’t increase near term, says the Northwest FCS report.

A price range of $4.75 to 5.75 per bushel is either at or below many producers’ breakeven price, says Stolp.

Apple and cherry crops also suffered due to drought and extreme heat, says the report. 

Northwest apple growers with large amounts of modern apple varieties and strains are projected to stay profitable, but low “pack outs” and prices for most apple varieties will result in many unprofitable growers, the report says. Fortunately, this follows a stretch of good harvests, so many are well situated financially, it says.

Pack outs refer to the amount of produce from a bin that is delivered to warehouses by a grower, says Matt Kloes, the manager for Northwest FCS’s Knowledge Center. “Fresh grade” produce, or the produce of high enough quality to be sold in places such as grocery stores, result in higher and more profitable prices. “Processor grade” produce is of a lower quality and used for things such as juicing and canning, Kloes says. 

Cherry industry profits will vary this harvest, the ag outlook report says. Growers with a large crop and strong pack out are expected to do well with the strong dollar. 

However, growers who didn’t have crop insurance and who were hit with rain and heat will have difficulty, it says. 

The largest wild card is the extreme heat the Northwest has been experiencing and how that will affect crops, the report says.

On a more positive note, the report says the beef industry is thriving. High prices, low feed costs, and strong domestic demand predict a profitable season as cattle supplies remain low. 

The forestry and nursery industries also indicate positive growth as the housing market continues to improve, says the report. 

“It’s not that they aren’t bright,” says Stolp about those industries, “but they certainly aren’t as bright as the cattle industry. There is nothing as bright as the cattle market.”

Overall, the 2015-16 season will depend on each industry’s yield quality and strength in each specific market, says Stolp.

“In the long haul, agriculture in the Northwest is a bright spot and great place to be,” he says.

Samantha Peone
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Reporter Samantha Peone joined the Journal in 2015 as research coordinator before later transitioning into a reporter role. She covers real estate and construction.

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