US: Farmers in good mood at Yakima Ag Expo

Dave Cowan replaced two pickups. Gene Gamache bought three new tractors. Ben Fisher purchased a chipper. Farming has been that good. "You've got to be in pretty bad shape to not be making money this year," said Cowan, a Yakima County Farm Bureau board member and diversified fruit grower in Grandview. That was the overall mood Thursday at the third annual Yakima Ag Expo at the SunDome, which continued Friday. Buoyed by high prices and a weak dollar, farmers throughout the Yakima Valley and the nation saw a profitable 2011. Those good times ripple throughout the economy as farmers keep seasonal employees longer, farm suppliers hire more workers and vendors sell more fertilizer, tractors and - for the more technically inclined - GPS guidance systems that take a lot of the guesswork out of field work.

"It's all tied together," said Gamache, a third-generation Moxee apple and hop grower. Not every crop is booming, but nationwide, farmers fared well last year, according to the U.S. Department of Agriculture. December statistics forecast that net farm income would be $100 billion in 2011, up 28 percent from 2010 and 50 percent higher than the 10-year average since 2001. Farm-life comedian Jerry Carroll has witnessed it. Farmers, often used to making do with used equipment, are buying brand new this time. "It's everywhere, every-where I've been," said Carroll, who entertained expo-goers with a stand-up routine. "The ag economy is the best I've ever seen it." Carroll grew up farming in Raleigh, N.C., and still owns a 100-acre soybean and oat farm. He performs 60 to 80 shows a year for agricultural-related organizations throughout North America. Economists pin the rosy news on a favorable supply-and-demand picture, which is driving up prices, and a low exchange rate for the U.S. dollar, which is making American exports attractive to buyers in South Korea, Japan and other markets.

"Exports are really important to the state of Washington," said Tom Marsh, a Washington State University agricultural economist. State-specific statistics are due out later this year, Marsh said, but he expects the story to be similar based on prices. Apple prices in June 2011, for example, were 26 percent higher than June 2010, he said. And while weather may have delayed the harvest of tree fruit in the Valley, wheat growers loved it, telling Marsh they had one of their best years ever.
Real or perceived shortages drove most of the price spikes, Marsh said. For several years, other countries have lacked in wheat stores, while a late harvest and scarce pickers led to fears of shortages for apples. In the end, the apple harvest was bigger than anticipated. More money for farmers usually means more business for support trades, such as equipment dealers. AG Tech Services of Moses Lake has been selling more GPS units that guide farmers through precision application of chemicals and water, said Jeff Malone, a salesman.

Burrows Tractors of Yakima, a New Holland dealership, saw record sales in 2011, said owner John Riel. He declined to say how stellar sales were but said they were strong enough to merit opening new shops in Wenatchee and Sunnyside. He also hired six new employees and invested $20,000 in training and computer equipment.
"It all goes around," Riel said. Tax incentives motivated many of those purchases, said Riel and growers. The federal government extended through 2012 a tax break that allows growers to write off up to $500,000 worth of equipment depreciation.
Gamache, the Moxee apple and hop farmer, purchased three of Riel's tractors Dec. 30, just before the end-of-the-year deadline. Gamache, the 58-year-old owner of Black Star Ranch, has seen high prices before and assumes low ones will come back someday. For example, hop prices have started to ebb due to oversupply, but his long-term contracts are still bringing in money. That will probably start to change next year.

Source: bellinghamherald.com