Slight profitability projected for Pacific Northwest growers
Apple crops, wheat likely to produce small returnsApril 25th, 2019
Many in Pacific Northwest food and agricultural industries are facing a slightly profitable year, reports the Spokane-based Northwest Farm Credit Services.
With log and lumber prices expected to increase and remain stable, profitable returns for timberland owners are anticipated, the report states.
Apple producers will see slightly profitable returns during the next 12 months as prices have increased. Domestic demand has been good for apples, says John Phelan, executive vice president, chief credit and risk officer at Northwest FCS.
“We probably have tighter margins in 2019 just because of having a larger crop combined with less export opportunities, but in general, we’re estimating a profitable crop,” Phelan says.
With wheat prices expected to be between $5.10 to $5.20 a bushel, producers can anticipate slightly profitable returns for the year, as well.
Potatoes will yield higher prices due to lower production and inventory, in addition to a smaller crop in 2019 because of delayed planting.
“When you get into Washington, we had so much snow over in the Columbia Basin that planting was delayed about three weeks or more,” says Phelan.
In regard to the wine and vineyard industries, the report states that growth in alcohol consumption is waning, however, the value in wine sales is increasing because consumers are choosing quality over quantity.
Challenges for the vineyard industry include increased labor costs and abundant grape supplies, the report states.
Phelan says the grass seed, nursery greenhouse, fisheries, and hay industries will all see growth in demand and profitability this year.
“The healthy snow this winter has led to a lot of usage of hay,” Phelan says.
Northwest FCS is a $12 billion financial cooperative that provides financing and related services to growers including farmers, ranchers and crop insurance customers in Washington, Idaho, Oregon, Montana, and Alaska. It is also a member of the nationwide Farm Credit system.
“At Northwest we finance a lot of different commodities. We have one of the most diverse portfolios, if not the most diverse portfolio, in the country within the farm credit system,” Phelan claims.