Northwest Farm Credit Service Reports Strong Year For Some In 2012

Co-op bank snapshots of crops reveals farm scenario for year.

Published on: Feb 26, 2013

Northwest Farm Credit Services, a Spokane, Wash.-based lender serving the West, says 2012 was a "strong year for most ag producers" in the region.

"Excellent yields and high prices are resulting in good profits for apple, wheat and sugarbeet growers, while tight supplies are bolstering returns for cow-calf and hay producers," the bank reports.

The Northwest farm industry "remains strong,"  co-op officials conclude.

In Idaho, for example, producers turned in a record $7.7 billion year for farm gate returns last year, and even posted a 5% net income return against a USDA report that nets nationally were down overall for farmers last year.

Dairy cattle struggled for profitability in 2012 as high feed prices cut into grower net returns.
Dairy cattle struggled for profitability in 2012 as high feed prices cut into grower net returns.

The following highlights depict the general health of select industries included in the NFCS "Knowledge Center Market Snapshots," which producers can view online at

BEEF: Cattle markets stabilized at the end of 2012 following a turbulent third quarter. Prices for calves, yearlings and fed cattle increased modestly despite continued corn market volatility. Cow-calf sector profitability remains strong and producers should enjoy healthy profit margins in 2013.

DAIRY: Northwest dairy producers are cautiously optimistic entering 2013. After enduring a year of rising feed prices and thin profit margins, Idaho produces generally experienced a profitable 2012. Returns in Washington are more variable, including profits and losses.

HAY: Northwestern producers benefitted from strong hay prices. Prices met resistance from dairy buyers throughout 2012, but tight supplies and high-cost alternatives limited the dairy industry's market influence. Export market growth helped to offset lower demand from dairies.

WHEAT: Strong yields and markets resulted in an outstanding year for most grain growers. Eastern and southern Montana were impacted by drought which hurt yields. Lower global wheat supplies may boost domestic wheat prices during the 2012-13 marketing year, but the pace of U.S. exports remains poor.

POTATOES: Potato markets are weak heading into 2013, pressured by increased production. While contract potato prices provided growers with profits, open potato returns are well below production costs.

SUGARBEETS: Despite widespread replanting last spring, growing conditions were favorable though the summer and fall, resulting high yields for the Northwest. Higher production was matched by good demand and favorable prices. Increasing world sugar production is expected to pressure prices in coming  years.

APPLES: The Northwest produced a record-shattering apple crop in  2012, attributed to increased orchard productivity and excellent fall weather with favorable prices. Strong demand led to  pressure to harvest as many apples as possible.

WINE/VINEYARD: The 2012 Northwest grape crop faced favorable weather and one of the best vintages ever in terms of quality in Oregon. Washington  grower also saw a record harvest of good quality. The outlook for Northwest grape growers and wineries is good, supported by increasing wine sales, bulk wine shortages in California, and an expected global wine shortage in 2013.

NURSERY/GREENHOUSE: Uncertainties in the general economy continue to impact on these industries, but the road to recovery appears to be obvious. Most producers expected to show modest profits for 2012.

For more on this story and a closeup of how Idaho ag did in 2012, see our article in the March Western Farmer-Stockman.