With more than 100 large wildfires burning in 12 states, Curt Covington, senior director of institutional credit at AgAmerica, said farmers are feeling the heat.
Persistent smoke can result in lower crop yields and reduced quality, Covington said, which has kept agricultural lenders like himself busy working with producers to provide much-needed financial breathing space.
"Believe me, we've been on top of this," Covington said. "It's been a great dialogue between lenders and farmers this entire summer."
AgAmerica, based in Lakeland, Fla., is a national company offering loans for farms across 20 different agricultural sectors producing more than 200 different crops. Its West Coast regional office is in Boise.
As of Aug. 18, there were 64 large wildfires burning 1.8 million acres in Oregon, Washington, Idaho and California, according to the National Interagency Fire Center.
Covington said they anticipated this year's fire season would be active across the West, causing commodity prices to fluctuate and putting pressure on supply chains.
"This is not something you can ignore and just say it will go away," he said.
Already, Covington said hay, cattle and dairy markets are seeing the effects of fire. Ranchers have seen their pastures go up in flames, increasing demand for additional feed for their animals to last through the winter.
Meanwhile, extreme drought and water shortages have drastically reduced yields in some areas. While hay prices are highly regionalized, Covington said he has seen examples of prices spiking $20 per ton over where they were a year ago.
Higher hay prices extend to the cattle and dairy industries, with producers spending more to keep their animals fed. Smoke can also impact the animals' metabolism and slow their growth rate and milk production.
"None of that is any good," Covington said. "We kind of forget that animals have the same respiratory system that we do."
Covington is also keeping a close eye on this year's winegrape harvest in Oregon and Washington. Winegrapes can be severely impacted by smoke, causing the finished wine to taste like a campfire or ashtray, diminishing their quality.
Oregon State University, Washington State University and the University of California-Davis have all mobilized to study smoke taint in wine. But if wineries reject contracts for tainted grapes, Covington said it could reduce inventory and raise prices for the region's wines, especially red varieties.
"The winegrape (harvest) is going to be a telltale sign of how bad this year was," Covington said.
When production of a certain commodity drops in one area, it means the supply chain must adapt and find it elsewhere, Covington said. So far, he said Northwest producers have largely avoided significant disruptions, which he credited to their resiliency.
"They always seem to find a way to manage their way out of these crises," he said. "I'll just be glad when summer's over."