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Ag sets record prices but costs nip income

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Saturday, December 01, 2007

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STATEWIDE Key agricultural industries are earning record prices this year, making 2007 a very good year for many of Oregon’s ag producers. However, rising costs mean net farm income in 2006 was down almost 10% from the year before.

At almost $10 per bushel, wheat is selling at the highest-ever price in Oregon, more than double what it sold for in 2006, says Bruce Pokarney of the Oregon Department of Agriculture.

Hazelnut growers negotiated the second-highest price in history, says Polly Owen with the Oregon Hazelnut Commission; the USDA reports an average selling price of $.70 per pound, up from $.54 last year (the highest-ever price was $1.12 in 2005).

While production is down about 10,000 tons from last year, Owen says this is not worrisome because hazelnuts are alternate bearing, and swings in production can be much greater.

Greenhouse and nursery products, Oregon’s No. 1 sector, will make history this year as the state’s first sector to pass the $1 billion mark, according to Pokarney.

Blueberries are expected to earn record prices, and production will easily break 40 million pounds, 5 million more than last year, says Bryan Ostlund with the Oregon Blueberry Commission.

The unprecedented growth is attributed to the diet and health craze over the antioxidants in blueberries. “Nurseries can’t get enough plants out the door,” Ostlund says.

Potatoes are selling for $5.65 per 100 pounds, compared to $4.90 in 2006, because supply is down.

Pears are up to $568 per ton over $527 last year. Grapes, Oregon’s fastest-growing commodity, doubled in production value from 2004 to 2006, and Pokarney says similar growth can be expected this year.

On the downside, onion prices declined significantly from last year, at $5.06 per 100 pounds compared to $10.90 in 2006. And Pokarney notes that while prices are up for many crops, costs are also increasing.

An economic report for 2006, released in October, shows net farm income in Oregon was down 9.6% from 2005. While gross income is at all-time highs, costs are also escalating because of rising fertilizer, pesticide and fuel costs and increased property taxes.           

AMBER NOBE


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