Herald and News: Basin ag product prices looking good

Basin ag product prices looking good

But high feed prices may hurt cattle market

By TY BEAVER

H&N Staff Writer
June 14, 2007

H N photos - Ty Kliewer takes time from behind the controls of a swather as he works his family’s alfalfa crop south of town Wednesday morning. Most alfalfa farmers can produce two, and sometimes three, harvests a season.

Many agricultural commodities produced in the Klamath Basin are expected to fetch good prices this year.

But that doesn’t mean it will be an overall good year, say the area’s agricultural experts and growers.

Markets for hay, grain and potatoes are showing positive signs, thanks in part to only a little weather trouble and no outstanding pest issues.

However, the cattle market could be strained by rising feed prices, and even in markets with good prices, producers are struggling with increasing fuel and labor costs.

“They’re trying to maintain that break-even level,” said Willie Riggs, director of the Klamath Basin Research and Extension Center.

Hay pr ices a re h igh because of a low yield in first cuttings in California and because of increased demand for horse hay, said Luther Horsley, a Midland grower. The demand for corn for ethanol production also is driving up prices as those with livestock look for feed.

The U.S. Department of Agriculture reported June 1 that premium alfalfa for domestic cattle in Lake County was selling for $150 a ton, up $15 from the same time last year. On June 8, the USDA reported that alfalfa of all qualities was selling for $10 to $15 more than the previous year in the northern and intermountain portions of California.

Grain market

The grain market also looks strong, Horsley said.

Brian Charlton, extension agent with the Klamath Basin Research and Extension Center agreed, citing increased demand for corn in ethanol production as well as a reduced supply caused by weather issues elsewhere, such as late frosts in the Midwest and a drought in Australia.

Horsley said he expected grain prices to remain high as long as demand and weather cooperate. A late frost could do a lot of damage, something that has occurred in parts of Northern California, said Harry Carlson, director of the Intermountain Research and Extension Center in Tulelake.

Carlson said wheat, barley and alfalfa fields are growing out of the frost damage, but several fields were significantly affected.

Potato prices

Potato prices are maintaining stable levels, something John Cross, general manager of the Newell Potato Cooperative, said is due in part to efforts — by grower associations such as the United Potato Growers of America — to minimize acreage to keep supplies on par with demand.

Basin commodities also are being helped by lack of any major pest problems. Charlton and Carlson said growers always battle some pest and disease issues, but there are no indications of significant outbreaks or of an introduction of any new infestations this year.

Even with markets that are expected to do well this year, producers struggle to break even many years, experts said.

Charlton offered as an example a report from the Columbia Basin, where potato contracts increased in value of about 25 percent. Production costs, on the other hand, increased 33 percent.

T he same situat ion applies to most every type of crop and is forcing producers to know not only what they can produce but also how much they can actually get off the market.

Kliewer looks over freshly cut alfalfa inspecting it for weevils and other insects that threaten the crop. An infestation can cut into profits by thousands of dollars making this a much less lucrative investment.

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