Northwest Farm Credit Services issues potato industry outlook
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Northwest Farm Credit Services (NWFCS) issued its latest market snapshots of industry drivers, profitability and outlooks for each of the ag sectors it services within its lending territory. A member of the nationwide Farm Credit System, Northwest FCS is a $10.9 billion financial cooperative providing financing and related services to farmers, ranchers and agribusinesses in Montana, Idaho, Oregon, Washington and Alaska.
In its row-crop sector, NWFCS notes that high Northwest potato yields are oversupplying markets and limiting uncontracted, open potato prices’ upside. Total U.S. potato production was up 1.7 percent in 2016, with the largest increases in Idaho and Washington, up 6.8 and 6.2 percent, respectively. Canadian imports add to ample U.S. supplies, incentivized by the strong U.S. dollar. Notwithstanding these challenges, contract potato growers remain profitable. Returns to uncontracted potato growers are generally below the cost of production. Cost management, efficiencies and market timing will be critical success factors in 2017.