Market Overview

Michael Stolp, Senior Analyst for Northwest Farm Credit Services gives us an agricultural market overview.Fortunes have shifted in Northwest agricultural markets. Nursery producers are wrapping up sales that will make 2014 one of the industry's most profitable years since the downturn began in 2008. Beef and cattle prices continue to post new highs, while Northwest dairies benefit from near-record milk prices. Strong prices in the protein sector are met with lower feed costs, resulting in exceptional profitability for many producers.

 

Caught between weak corn markets and a record-breaking world wheat crop, Northwest wheat prices are expected to be near breakeven for most producers. Prospects for short-term improvement in sugar beet and potato producers' profitability are limited. Sugar beet returns are constrained by low global sugar prices. Unprofitable open market potato prices could see an uptick if demand for processor grade potatoes increases.

 

Looking ahead, global market trends and reduced competitiveness of U.S. exports may impact the apple, dairy, and cattle industries. Lower export demand is already impacting the forest products and hay industries. However, the full impact of California drought has yet to be felt. Without improvement, production shortages in 2015 could boost the price of a broad swath of agricultural commodities.