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Northwest Farm Credit: Crop Outlook Positive Despite Cool, Wet Spring

Northwest Farm Credit: Crop Outlook Positive Despite Cool, Wet Spring

Strange spring weather impact on crops measured by Northwest Farm Credit.

Weather has been a key factor this year for agricultural producers. Since most crops were delayed at least several weeks in planting, harvests will be later than usual. A slow economy continues to hinder the nursery and timber industries at the same time, observe Northwest Farm Credit Services officials in Spokane, Wash.

The following highlights depict the general health of select industries in the Northwest FCS Knowledge Center Market Snapshops.

BEEF: Cattle prices continue to spark optimism with cow/calf pairs selling from $1,600 to $2,000 in recent weeks. The price for a 550-pound steer has moderated from recent highs, but is still at record levels. Strong exports have helped offset flat domestic demand for beef. Beef shipments to Japan are up 81% from year ago. Producers are looking forward to another good year.

WHEAT: Northwest wheat producers have dealt with an unfamiliar challenge this spring – too much rain. Regardless of area, producers cite hurdles surrounding planting, crop disease and delayed harvest.

DAIRY: Northwest dairy producers' progress varied in the first half of 2011. In Washington, improved and more stable milk prices supported most producers' profits through June. Southern Idaho dairymen, however, faced lower milk prices and varying levels of profits or losses. Regardless of location, rising feed prices continue to challenge Northwest dairy producers' bottom lines.

APPLES: The outlook for the Northwest apple crop is cloudy. Current strength in the marketplace should carry over to thee 2011/12 marketing year, but optimism is tempered by uncertainties around apple production. Fruit development will be closely monitored in the months ahead.

HAY: Hay supplies in the Pacific Northwest are tight. The 2011 season began with low hay inventories, and the cool, wet spring significantly delayed the first cutting. Although the region is now moving toward the second cutting, hay yields and quality have been impacted by adverse weather. Strong demand for new crop hay is driving prices toward levels not seen since 2008.

CHERRIES: A late harvest and large crop have challenged cherry growers. At 17.2 million 20-pound-boxes, the cherry crop was predicted to be the second largest on record. This will be the first year where more cherries are available in August than in June.

NURSERY & GREENHOUSE: Abnormal weather conditions early this spring eliminated sales opportunities for most producers. June sales, though, were significantly higher than the prior year's, with improved weather conditions. This year is expected to produce stronger sales results than in 2010, but producers still face a sluggish market and escalating costs that further compress margins.

POTATOES: Potato crops throughout the Northwest are delayed, but in good condition. Weather and growing conditions across the next 90 days will determine final yields. Processors and the fresh market are competing for tight old crop supplies. Producers are benefiting. Northwest potato markets mirror national markets, were prices are strong. Given the late 2011 crop, processors may experience August supply gaps.

SUGAR BEETS: Crops look good with fewer acres replanted due to the wet spring. Industry analysts generally agree that sugar prices will remain strong throughout the year, supported by tight supplies and growing demand.

WINES & VINES: After two years of sluggish activity, domestic wine retail sales grew 7% in 2010. The U.S. surpassed France as the world's largest wine-consuming nation last year. There is uncertainty around Washington's 2011 vintages due to two freeze events last winter. About 20%-30% of Washington's grape crop was damaged.

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