If the U.S. produces a record corn crop, as is expected, a Northwest Farm Credit Services report says the impact on the Northwest will be continued lower corn prices, but that cattle and dairy producers will enjoy reduced feed costs as a result.
Meanwhile, beef cattle prices are up and milk production is expected to increase, reports the Spokane-based NFCS.
Wheat prices are also dropping in the region, adds the report, which notes a record-breaking world crop adds to the decline.
Hay prices are bolstered by a lack of high quality alfalfa, the lender notes.
Here's how the Northwest (the NFCS region includes Montana, Idaho, Oregon, Washington and Alaska) sees the crop year shaping up:
- Beef: Stronger markets and improved margins for feeders are anticipated, with cash markets for cattle good in July and August, halting a decline since the beginning of the year. Tight cattle supplies help keep prices firm, and feedlot demand is expected to remain strong as operators seek to secure cattle.
- Dairy: Breakeven business will continue, but prices are expected to remain stable through December. Milk prices are expected to drop in 2014 due to rising global production.
- Hay: Strong prices exist despite limited market movement. Crop damage was widespread across the region, perpetuating shortages of quality product. Weaker demand from Northwest exporters and marginal dairy profitability keep markets in check.
- Wheat: The marketplace in the NW is changing, with pressure from a record corn crop pressuring grain prices, reducing the amount grain used as feed. Profitability potential is good for most NW producers this year.
- Potatoes: Good quality as the NW harvest continues. Crops in eastern Idaho are mostly top grade, while in the Columbia Basin high temperatures reduced sizes and yields, although quality appears to be above average.