Cautious but optimistic commodities outlook

— Northwest Farm Credit Services, the Northwest’s leading agricultural lending cooperative, has released its quarterly Market Snapshot publications that look at the state of major agricultural commodities.

The outlook varies by commodity, with the majority of producers looking at slightly profitable results for their efforts.

Northwest FCS is an $11 billion financial cooperative providing financing and related services to farmers, ranchers, agribusinesses, commercial fishermen, timber producers, rural home owners and crop insurance customers in Montana, Idaho, Oregon, Washington and Alaska. For more information, go to


Cattle producers are expected to be slightly profitable in 2017. A short-term supply shortage drove prices for all classes of cattle higher during the first half of the year. An influx of slaughter cattle later in the summer is expected to drive prices lower than a year ago.


Lower milk production and weak prices strained producer profitability in the first quarter of 2017. However, Northwest dairy farmers are beginning to return to profitability as warmer seasonal weather returns dairies to normal operation. The USDA’s forecast supports slight optimism, projecting an all-milk price between $17.80 and $18.40 per hundredweight in 2017.


Export markets rose in the first four months of 2017, increasing 21 percent. Alfalfa prices have remained depressed leaving only slight profit margins for growers. Tight supplies of timothy have strengthened prices. Northwest FCS’ 12-month outlook is for slightly profitable returns for alfalfa growers and very profitable returns for timothy growers.


The industry grew sales by almost 4 percent compared to last year. Sales growth is expected to continue into the 2018 shipping season, but inventory availability will determine how much growth is achievable. The nursery/greenhouse sector is profitable due to strong demand and prices.


The National Onion Association’s April report indicates mixed to low demand for much of the second quarter. Grower returns are projected above breakeven; prices may improve with overall lower production and favorable marketing conditions. However, this depends highly on weather trends for the remainder of the growing season. The Northwest FCS 12-month outlook is for slightly profitable returns for onion producers.


Low supplies of quality, fresh-packed potatoes are pushing up prices. The cool, wet spring will likely lead to lower yields for early dug potatoes. However, potatoes harvested later in the season may recover should warmer temperatures arise in July and August. Contracted potato growers continue to see slight profitability. Uncontracted growers are likely to remain at below break-even levels.

Small grains

Wheat acres are the lowest ever recorded by the USDA. Early planted spring crops fared well, taking advantage of available moisture. Late-planted spring crops have been challenged by above-average temperatures and drying conditions. Low prices and variable crop conditions are leaving many growers below breakeven.


Prices in general are increasing slightly. Reds, Galas and other less domestically desirable varieties are finding relief in the export markets. The apple industry is profitable due to favorable prices for new varieties and a strong export market.


The Northwest crop is estimated at a record 24.5 million 20-pound boxes. Due to the cold spring, the peak of the season is later than the typical Fourth of July holiday. Although storms have occurred in areas across the Northwest, no significant damage has been reported.


The percent of the 2016 pear crop shipped to date is lower than the last five years due to weakened exports and lower domestic demand. The 2017 crop is estimated at 17.6 million 40-pound boxes, which is smaller than the 2016 crop. Overall good quality for the 2016 crop has kept producers profitable.


Although some producers were subject to freeze and other winter damage in the vineyard, the broader wine industry outlook is positive entering the summer growing season. The wine industry is strong, with sales growth of 3 percent year over year and the direct-to-consumer segment is still cranking out double-digit sales growth.


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