Record Washington farm values during drought a puzzle

Don Jenkins

Capital Press

Published on November 9, 2016 9:56AM

Don Jenkins/Capital Press
A sprinkler shoots water over a field in southwestern Washington in the summer of 2015 during a severe drought that hit the entire state. Nevertheless, the value of Washington’s agriculture production reached an all-time high of $10.7 billion that year, according to the USDA.

Don Jenkins/Capital Press A sprinkler shoots water over a field in southwestern Washington in the summer of 2015 during a severe drought that hit the entire state. Nevertheless, the value of Washington’s agriculture production reached an all-time high of $10.7 billion that year, according to the USDA.

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Washington state set a record in 2015 for farm production, even though the state suffered a historic drought — creating a paradox for economists, producers and policymakers to puzzle over.

The USDA recently released its annual statistical bulletin for Washington, a report on yields, prices, acres harvested and livestock sold in 2015. The state’s agricultural production totaled $10.7 billion, topping by 5 percent the record $10.2 billion set in 2014.

Apple prices were a big reason. The drought lessened the harvest, but higher prices pushed the value of the crop to $2.4 billion, about $500 million more than in 2014.

But even without apples, the state’s aggregate farm economy held up, defying expectations that the drought would inflict a heavy overall loss.

Washington State University Extension economist Michael Brady said other factors may have “sort of swamped the drought’s negative effects.”

“There are a lot of reasons farm income could have increased in 2015. It would take a more detailed study,” he said. “It could be that net farm income would have been higher” without the drought.

The USDA did not attempt to assess drought effects. Gains and losses in crop values were as diverse as the state’s agriculture.

“Every one has a little bit of a story,” said Chris Mertz, Northwest director of the USDA’s National Agricultural Statistics Service.

Heading into the 2015 growing season, the Washington State Department of Agriculture projected that crop losses would total $1.2 billion, a figure widely reported to highlight the potential severity of the drought.

The number was based primarily on anticipated water shortages in the Yakima Valley, the state’s most valuable farm region.

The losses did occur, said Urban Eberhart, manager of the Kittitas Reclamation District based in Ellensburg.

Yakima Valley farmers with senior water rights received full supplies, but growers in the Kittitas district and elsewhere with more junior rights received less than half their normal allotment from the Bureau of Reclamation.

“You have negative impacts on half the users and the other half is doing OK,” Eberhart said. “There were significant economic losses to a lot of individual growers in our district. There’s no question about it.”

The state Department of Ecology — the lead agency in organizing drought relief for fish, cities and farms — has asked WSDA to assess farm losses, including in the Yakima Valley irrigation districts vulnerable to water curtailments. A final report is expected by February.

WSDA spokesman Hector Castro said the drought was a problem across the state, with some regions suffering significantly more than others.

Crop values could have been helped by increased acreage, recently planted fields coming into production and the price of commodities, such as apples, rising in a drought, he said.

Soon after the 2015 growing season, WSDA made a preliminary estimate that the drought caused $336 million in losses statewide.

Since that report, the USDA has gathered more information on yields and prices, which may alter parts of WSDA’s early estimate.

WSDA projected an $86 million loss for the apple industry due to the drought, assuming the average price of apples stayed at 31 cents a pound, same as 2104. The average for 2015 was actually 48 cents a pound, according to the USDA, a price that more than offset lower production.

The value of milk production, the state’s No. 2 farm product, was down. But prices were higher in 2015 than this year, cushioning the fall.

“The guys fondly remember 2015 because the prices aren’t there now,” said Grays Harbor County dairy farmer Jay Gordon, policy director for the Washington State Dairy Federation.

For wheat growers, 2015 was the second-straight harvest below historical norms. Per-acre yields for hay statewide were steady, but the number of harvested acres declined to 750,000 from 870,000. As a result, the value of hay production declined to $499 million from $702 million the year before, according to the USDA.

In addition to apples, hops, eggs, and cattle and calves set value records, according to the USDA.

The USDA also reported that red raspberries enjoyed a stellar year, a finding that Washington Red Raspberry Commission Executive Director Henry Bierlink said was at odds with the commission’s numbers.

The drought reduced yields, he said.

“The prices were good, but the production was low,” Bierlink said. “Heat is no friend of raspberries.”



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