Outlook Mixed For Ag Industries In The Northwest

AgWest Farm Credit has released its quarterly Market Snapshot reports covering the state of major agricultural commodities in its northern region of Idaho, Montana, Oregon, Washington and Alaska. AgWest’s industry experts gather market information from various sources to deliver commodity-specific insights. All Market Snapshots are available at AgWestFC.com/industry-insights.

AgWest’s 12-month outlook for specific regional agricultural commodities is summarized below:

Cattle

The outlook for cattle suggests profitable returns for cow-calf producers and slightly profitable returns for cattle feeders. Cow-calf producers will enjoy record cattle prices and lower production costs. Even with lingering drought in areas and some grasshopper issues, western producers are optimistic about reaching record cow-calf margins in the next one to two years. Cattle feeders and packers will have to pay higher prices for cattle but will benefit from strong beef demand despite higher retail prices.

Hay

The outlook for hay suggests slightly profitable returns for alfalfa and breakeven returns for Timothy. A large crop and waning exports have weakened hay prices. While prices have likely bottomed out, export and domestic demand has been slow. Ongoing port challenges have been resolved providing relief for hay exporters.

Potatoes

The outlook for potatoes suggests profitable returns for contracted and uncontracted potatoes. Northwest potato production is expected to recover to historic levels after two years of decline. This will ease the strain on processors who have faced potato shortages but will likely reduce open-market potato prices to breakeven or lower.

Small Grains

The outlook for small grains and pulse crops suggests slightly profitable returns. Worsening drought across the Northwest hurt soft white winter wheat yields. Despite historically low global production, prices are softening as Russia floods the export market with cheap wheat. Producers will face headwinds from lower prices and below-average yields.

AgWest is a financial cooperative with approximately $30 billion in total assets that provides financing and related services to farmers, ranchers, agribusinesses, commercial fishermen, timber producers, rural homeowners and crop insurance customers primarily located in seven Western states. AgWest is part of the 107-year-old Farm Credit System – the leading provider of credit to American agriculture. AgWest serves customers in 59 locations throughout the West. For more information, visit agwestfc.com.