Willamette Valley Ag in a Profitable Period
By Bob Boyle
Regional Vice President, Northwest Farm Credit Services
As far as the general economic health of agriculture in the Willamette Valley, I’ve seen significant improvements from what we observed certainly from 2008 to 2011, which I considered to be some of the worst economic times we’ve experienced in Northwest Oregon in decades.
I’ve seen general improvements throughout most of the major commodity groups in 2013, and I expect 2014 to be a good year. Grass seed markets have improved significantly with a stronger demand for inventories at prices much more favorable than we saw in the previous two years. That is translating into profits for most grass seed producers.
The nursery industry, which for many years has been one of the major commodities in Oregon, is seeing signs of a long-overdue recovery attributed in part to improvement in the general economy and signs of improvement in the housing sector. What that means for most nursery producers is a stronger demand for nursery products this year than they’ve seen for four to five years, and at prices that are higher than in recent years.
As you look at the timber products industry, I think we are still a ways out from starting to experience the robust demand for lumber that we have seen in years past. However, demand for new home construction, along with a pent up demand for housing in general, will bring with it a stronger demand for lumber. We have seen higher prices for lumber as the housing market begins to improve.
The filbert industry intrigues me right now. When I see the number of acres going into filberts, and realize that we are a ways down the road before those new plantings begin to bear nuts and generate any kind of profitability, I think that is an industry that is worth watching. It has been a profitable industry in recent years. However, what I continue to see in agriculture is that profits incent expanded production and entry by new producers. Marketing becomes a key challenge to move product.
We’ve also seen that in blueberries. Fortunately, it doesn’t take much of an uptick in demand to absorb production, and fresh-market blueberries still continue to be sold at a pretty decent price. But the industry has had a surge of new plantings over the past decade, and as those berries come into production, my hope is that we continue to enjoy the benefits of a strong demand.
I think the industry as a whole has been pretty successful in promoting the health benefits of blueberries. That has helped producers to move product. However, there are a lot of new blueberry plantings out there.
It is all about how product is marketed in the future and what the consumer preferences dictate, because there is a huge volume of blueberries coming into production. This is an industry that needs to maintain a strong focus on marketing. It now enjoys global demand unlike we’ve seen historically. I just hope that continues and absorbs the new production that will hit markets in the years ahead.
By and large, I’m seeing most of the major commodity groups in a profitable period of time right now. I think 2014 is stacking up to be maybe as strong as we saw in 2006 and 2007 for Willamette Valley producers.
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