SPOKANE, Wash.—The outlook for the Northwest agricultural industry is mixed. Prospects for many producers are influenced by the expectation of a record Midwest corn crop. Lower corn prices should help dairies and feedlots, but will likely pressure hay and wheat prices lower. Demand for Northwest apples is strong, but the industry faces a trend of increasing production that could eventually oversupply the market. Good profits for sugar beet producers the last few years are being challenged by increased global sugar production, while potato growers that sell into the open market are expected to experience a second year of low prices. The apparent recovery in the U.S. housing market has sparked a surge in prices for the forest products industry, but has yet to make a material impact on recovery in the nursery industry. U.S. consumers continue to purchase more wine, which bodes well for wineries and wine grape growers in 2013.
Potatoes—Increased yields and acreage in 2012 caused a potato surplus. Growers are experiencing the side effects. Open potato prices range from $1 to $3 per cwt, compared to producer breakevens between $5 and $7 per cwt. For those growing contracted potatoes, contract prices were near $7 per cwt in 2012. Despite low returns, United Potato Growers projects planted acreage will decline by only 3 to 5 percent in 2013. It is expected that a 10 percent reduction in acreage would better balance potato supply with demand.
SOURCE: Northwest FCS