SPOKANE, Washington — Northwest Farm Credit Services, an agricultural lending cooperative, released its quarterly Market Snapshot reports covering the state of major agricultural commodities in the region. Northwest FCS industry teams throughout Idaho, Montana, Oregon and Washington monitor conditions and report outlooks for commodities financed by the co-op.
Northwest FCS’ 2020 outlook for the agricultural commodities most common in Northeast Oregon are summarized below.
Cattle: profitability throughout the beef sector
Slaughter facilities are very profitable as they remain in a position of leverage over producers. Cattle feeders will be break-even to slightly profitable with variation based on risk management strategies. Cattle producers are expected to be slightly profitable as strong demand for beef is coupled with peak cattle inventory.
Forest products: profitable margins for timberland owners and sawmill operators
Although log prices remain low compared to 2018’s peak, margins are profitable for timberland owners and prices are expected to remain stable or improve. Processors have worked through high-cost logs from 2018 and lumber prices are slightly improving.
Hay: moderate profitability
Alfalfa profitability will moderate as producers intend to plant more acres in 2020. Large inventory of mid-grade timothy continues to drive languid prices, weighing on profitability.
Nursery/greenhouse: solid profitability
A strong economy will support stable housing demand, which will continue to sustain strong nursery sales. Growers secured price increases in recent years and modest price rises are expected in the year ahead. However, growing labor costs remain a challenge for producers.
Onions: slightly profitable returns
Onion prices would be profitable but given variability of packouts, returns vary by producer and growing region. International competition driven by the strong dollar will continue to favor imports as domestic supplies remain low.
Potatoes: profitable contracted and uncontracted potatoes
An early cold snap froze as much as 15% of fresh market potatoes in Idaho. Other major production regions in the U.S. suffered the same fate.
Sugar beets: profitable
USDA’s forecast suggests a drop in the stocks-to-use ratio from 14.5 (2018-19) to 13.5 (2019-20), a favorable ratio for Northwest sugar beet producers.
Wheat: break-even returns
USDA’s projected 2019-20 season-average farm price for all-wheat is $4.80 per bushel, down $0.20 from last year. Variability in yield and quality will drive individual producer profitability.
Apples and cherries: slight profits
A large apple crop has tempered prices. However, good fruit movement and continued trade agreement momentum should support prices in 2020, and varieties and quality continue to play a role in profitability. Mild weather during the cherry growing season resulted in good fruit quality. Strong domestic demand after major crop loss in California created strong markets for Northwest cherries, but pricing programs set earlier in the year tempered returns.