Feb 8, 2022Input costs, inflation expected to affect Pacific Northwest ag
Northwest Farm Credit Services, a Northwest agricultural lending cooperative, has released its quarterly Market Snapshot reports covering the state of major agricultural commodities in the region.
Northwest FCS teams throughout Idaho, Montana, Oregon and Washington monitor conditions and report outlooks for commodities financed by the co-op.
Northwest FCS’ 12-month outlook for the agricultural commodities most common in the Northwest are summarized below.
The profitability outlook for onions suggests breakeven returns. Producers with remaining 2021 large onions in storage will be well positioned to capture higher prices. Profitability in 2022 will depend on growing conditions; increased moisture is needed to make up for 2021 shortages. Rising input costs will create headwinds for producer profitability.
Contract potato producers are projected to be profitable. Open potato returns are projected to be slightly profitable. The amount of non-contracted potatoes acres will likely decrease as higher cost of production will encourage producers to shift non-contracted acres to other commodities. Fuel and fertilizer costs will continue to rise going into 2022.
Profitable returns are expected for sugar beets. Rising input prices will provide headwinds, but favorable producer payments will counteract increased costs.
The hay industry outlook calls for profitable returns. Extremely low inventory will keep hay prices elevated through much of 2022. Rising input prices will provide headwinds to producer profitability.
Profitable returns are expected for wheat producers. High prices, crop insurance payments and government programs cushioned potential losses from low production in 2021. Implementation of crop insurance and grain marketing strategies will provide tailwinds to small grains profitability.
Northwest FCS is a $14 billion financial cooperative providing financing and related services to farmers, ranchers, agribusinesses, commercial fishing operations, timber producers, rural homeowners and crop insurance customers in Montana, Idaho, Oregon, Washington and Alaska. Northwest FCS is a member of the nationwide Farm Credit System that supports agriculture and rural communities with reliable, consistent credit and financial services.
All Market Snapshots and audio highlights are posted online at northwestfcs.com/industry-
For more information, go to northwestfcs.com.