Poor Year For Wheat, Apples Predicted Universities, Trade Groups Pessimistic In Survey

1998 is expected to be a poor year for wheat and apples, two of the Northwest’s biggest farm crops, according to a joint survey by area universities and trade groups.

But dairy farmers and meat producers in Washington, Oregon and Idaho should fare better, according to the 1998 Pacific Northwest Agricultural Situation and Outlook Report.

The report is compiled each year by 44 agricultural economists and others at Washington State University, Oregon State University, the University of Idaho, and private businesses.

Wheat farmers will be hurt for the second consecutive year by a supply that exceeds demand, said Jon Newkirk, a WSU economist in Ritzville.

The world’s first 600-million-metric-ton harvest is expected to push the stockpile of wheat worldwide to 22 percent above consumption. In the United States, the stockpile will grow from 15 percent to 27 percent of consumption, he said.

The supply of white wheat, the most common in the Northwest, is expected to be 67 million bushels, up 12 million from two years ago.

The Northwest apple crop was down 6 percent in size this year, but that isn’t expected to raise prices much, said Tom Schotzko, a WSU economist.

“On average, 1998 prices should be about 15 percent above the same time a year earlier,” he said.

Reasons for a lack of optimism include financial turmoil in Pacific Rim markets that are big importers of Northwest apples, a shortage of trucks to move the fruit to markets and a huge tariff in Mexico that is reducing sales.

Dairy farmers should see a slight increase in use of their products.

“As we move into 1998, look for a sharp decline in butter prices along with a more moderate drop in cheese prices,” said Gayle Willett of WSU.

Milk prices dropped by as much as 30 percent by mid-1997 but could rise in 1998.

Meat producers should see better returns after two years of low prices, said Wilson Gray of the University of Idaho, who works in Twin Falls.

Cattle herds that were reduced by 3 percent in 1997 should be reduced at a slower pace in 1998, he said. That should increase beef prices.

Potato growers should benefit from a smaller crop and a strong demand for dried potato flakes, said Joe Guenthner of the University of Idaho.

Northwest farmers grew 7 percent fewer potatoes in 1997, harvesting 589,000 acres.