Apples, Wine, Lumber

Apples, Wine, Lumber

David Sparks Ph.D.
David Sparks Ph.D.
Today we wind up what are called Market Snapshots from Northwest Farm Credit Services. They have a team of people who examine all factors that can affect the outcome of a crop be it weather, financial conditions, competing international and national markets, you name it. Today were going to hear about what went on in the Northwest as it relates to commodities that are important to Idaho. Here's Matt Kloes: "The outlook for the Northwest apple industry is tempered from last season. The largest crop in Northwest history is matched with large crops elsewhere in the Northern Hemisphere. Export sales will be pressured by the combination of a large global crop, a strong U.S. dollar, and trade restrictions in certain markets. Average apple prices are decreasing in both the fresh and process markets, while growers face higher labor costs this year. Efficient growers with a high concentration of desirable apple varieties and strains are expected to maintain profitability.

Wine grape harvest is underway throughout the Northwest, with many producers getting an early start. Washington and Oregon producers are projecting record crops, supported by ideal growing conditions and continued expansion of vineyard acres. The 2014 Idaho crop is expected to be larger than last year. Nonetheless, a grape shortage in Idaho is possible given that winery growth is outpacing vineyard acreage development. In general, wine consumption trends bode well for Northwest wineries and grape growers.

U.S. housing starts continue to fall below expectations, contributing to continued volatility in the forest products industry. Headwinds in the housing market include tight credit standards and low levels of new household formations. Weaker demand drove lumber and panel prices lower at the end of the quarter, while log prices continued to decline throughout the quarter. Log prices, though, remain at relatively high levels, supported by short-term supply constraints. Exports have been a key driver of log prices in the Northwest, but export demand has softened this year. Exports levels are expected to continue declining into 2015.

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