Small Profits Forecast For Most Growers In 2017
SPOKANE — Potato and onion farmers, apple and cherry growers, ranchers and hay growers may make money in 2017 – not a lot, but a little. That’s the conclusion of a quarterly market update issued by the Farm Credit Services office in Spokane.
“The outlook varies by commodity, with the majority of producers looking at slightly profitable results for their efforts,” the report said.
The chilly, wet spring delayed the growing season for many commodities, including onions and potatoes. “Low supplies of quality, fresh-packed potatoes are pushing up prices,” the report said.
Lower yields are expected for early potatoes as a result of the cold rainy weather, but warmer weather may help later-season harvest. “Contracted potato growers should continue to see slight profitability. Uncontracted growers are likely to remain at below break-even levels.”
The cool spring delayed and shortened the onion growing season. “Grower returns are projected above break-even,” but any improvement in prices will depend on growing season weather. The organization’s projection is “slightly profitable returns” for onion farmers.
Cherry harvest 2017 is in full swing and apple harvest is on the horizon. The Washington cherry crop could set a record, and will follow a record crop in California. That has put downward pressure on cherry prices.
Apple prices are increasing slightly as harvest approaches. Packouts (the fruit that goes in the box and gets sold) are being affected by storage quality issues, the report said, but most of the 2016 fruit should be sold before harvest. “Red (Delicious), Gala and other less domestically desirable varieties are finding relief in the export market. The apple industry is profitable due to favorable prices for new varieties and a strong export market.”
Hay inventories have decreased, although they remain above the 10-year average, and export sales have increased. Eastern Montana is experiencing drought conditions, which will tighten supplies and raise prices. Timothy hay growers can expect very profitable returns. But "alfalfa prices have remained depressed, leaving only slight profit margins for growers.”
Cattle prices went up in the first half of 2017, but “an influx of slaughter cattle later in the summer is expected to drive prices lower than a year ago.” The export picture is good, however. “Global markets for beef are positive with double-digit year-over-year growth” and openings into China. Cattle production is projected to be “slightly profitable over the next year.”
Wheat growers, on the other hand, aren’t having a good year. “Wheat acres are the lowest ever recorded by the USDA.” The cool wet spring was good for early planted spring wheat, but “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 break-even.”
The state’s wine industry is still growing, “with sales growth of 3 percent year over year, and the direct to consumer segment is still cranking out double-digit growth.” Some vineyards suffered winter damage. The long cold winter and wet spring “are pushing the vineyard industry back to normal growing conditions compared with recent years.”