Ag lending cooperative Northwest Farm Credit Services has released its quarterly Market Snapshot publications that look at the state of major agricultural commodities in the Northwest.

Potatoes 

Northwest potato production is mixed. In Idaho, favorable weather conditions support strong yields, up 5 to 10 percent from the prior year. Washington potato yields are down by the same percentage, limited by high early-season temperatures. Although fresh market potato prices were initially profitable, markets are now at or below producers’ costs of production. Lower fuel, fertilizer and pesticide expenses help buffer potato growers’ margins.

Sugarbeets

Favorable growing season conditions propelled sugarbeet yields and sugar content above historical averages in Idaho and Montana. Strong yields are met with weakening domestic demand due to consumers’ attitudes toward genetically modified sugarbeets. However, global sugar demand continues to outstrip production. In China, August sugar imports increased more than 30 percent over the prior year.

Onions

Onion growers are guardedly optimistic entering fall. Good quality and large sizes are reported in eastern Oregon and southwestern Idaho. In the Columbia Basin of Washington and Oregon, stands vary, but yields are near historical averages. Lower U.S. onion imports and growing season challenges in Japan support manageable supplies. Therefore, expectations are positive for profitable onion prices through year’s end.

Hay 

Ample and low-priced feed supplies are swamping hay markets. Favorable growing conditions increased hay, grass, alfalfa and corn silage yields throughout the Northwest. Strong production and old-crop inventory carryover continue to challenge hay prices, with many growers accepting offers between $55 and $100 per ton for fair-quality hay. Demand from U.S. dairies is lackluster, but export demand is up nearly 11 percent year to date.

Wheat

Northwest wheat producers’ yields are bursting bins, but low prices are squelching profits. Year over year, U.S. wheat supplies are up 17 percent and global wheat supplies are a record 745 million metric tons. In Washington State, winter wheat yields set records. The USDA projects 2016-17 all-wheat prices at $3.30 to $3.90 per bushel, at or below producers’ cost of production. Bright spots include millers’ price premiums for high-quality wheat.

Beef

Current and projected cattle markets are volatile and trending down. Bearish market forces include increasing herd numbers and beef production, sluggish beef exports and a relative decrease in poultry and pork prices. The USDA’s recent decision to allow Brazilian beef imports is significant, but the net effect on U.S. markets is limited due to the Other Country Tariff Rate Quota system. (The quota caps beef exports from Brazil and other named countries at 64,000 metric tons).

Dairy

After increasing more than $2 per hundredweight between May and August, December class III milk futures slipped, weighed down by butter and cheese inventories. However, lower feed prices are softening falling milk prices’ impact on dairy producers’ profit margins. Cost of production is down by as much as $1.50 per hundredweight on dairies where new-crop inventories enter feed rations. Globally, milk production is slowing, especially in the European Union and Australia.

Fisheries

Good fishing and strong demand support higher or sustained prices for many fisheries, including pollock, Pacific cod and halibut. Other fisheries, such as black cod, pink shrimp and salmon, face challenges. Whale predation of black cod, a salmon run failure in Alaska’s Prince William Sound, and a voluntary shutdown of the pink shrimp industry challenge these fisheries. Overall, the fishing industry faces opportunities in consumers’ preferences for healthy, sustainable proteins.

Forest Products

The U.S. housing industry drives demand and prices in the forest products industry. Although housing starts are up nearly 6 percent from 2015, they remain below sustainable levels. Pent-up housing demand supports the forest products industry in the long term. In the near term, recently improved lumber prices face challenges from rising Canadian lumber imports. Log price increases are limited by ample supplies fueled by summer logging not hindered by forest fires.

Nursery/Greenhouse 

Nursery and greenhouse growers are optimistic, citing strong demand. Ornamental buyers are committing to orders early to assure access to product, driving year-to-date sales up nearly 10 percent. Greenhouse sales are similar to last year, with increases limited by adverse seasonal weather. Overall, the outlook for the nursery and greenhouse industry is positive, buoyed by inventory shortages, strong demand and expectations for rising housing starts. Labor shortages continue to temper producers’ optimism.

Apples

Most Northwest apple producers are optimistic for new-crop quality and pricing. After last year’s 114.6 million-box crop, the new apple crop is estimated to be Washington State’s second- or third-largest in history, at 120 million to 130 million boxes. Strong production meets favorable fruit coloring, sizing and overall quality, supported by a nearly optimal growing season. Exceptions include instances of bitter pit in storage for some varieties. Access to harvest labor remains adequate and early 2016-17 pricing is strong and stable.

Cherries

The Northwest’s 2016 sweet cherry season closed successfully, with performance varied across regions. Warm spring weather caused “flash bloom” in some orchards, reducing pollination from 10 days to as few as two days, which reduced some growers’ yields. However, larger fruit sizes and quality somewhat offset lower yields. Prices followed seasonal trends, with strong early- and late-season returns and some variability mid-season.

Pears

An early Northwest pear harvest led to a strong market and positive industry outlook. The 2016-17 crop is projected to be larger than last year’s crop, which was the smallest in five years. This year’s crop size is estimated below the five-year average. Outstanding fruit quality offsets relatively lower pear volumes, supporting higher pack-outs. Together, manageable crop volumes, high quality and strong current and projected crop prices fuel industry optimism.

Wine/Vineyard

Wine grape harvest is coming to a close and yields are strong. Demand is driven by consumers seeking high-quality, branded wines, which are typically in the $20-plus price range. The direct-to-consumer market remains an opportunity for wineries looking to grow in the premium segment. Buyers of wineries wanting to shore up fruit supply or purchase a well-known brand are driving mergers and acquisitions in the industry.