Grass seed and nurseries on the rise; hay values drop

As harvest season swings into gear, we take the pulse of Oregon ag.

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With enough snowfall and precipitation to fill the reservoirs for the year, Oregon crops are faring well on average despite the unusual summer weather. The kind of weather where it’s pouring and 66 degrees one day, and a balmy 97 the next. All summer long. 

Unlike the Midwest where one crop is king, Oregon’s crop output is diverse enough to survive almost any downward trend, including inclement weather, says Bart Eleveld, economics and farm management for Oregon State University’s extension service.

“If grain is doing poorly in Iowa, Iowa does poorly. Whereas here grain is just a part of the picture,” says Eleveld says.

This year the weak link is hay; the problem isn’t a poor yield but logistics.

Forage product exports — sending excess straw and hay to Asia for other animals to eat — is a business with a razor thin margin.  And the Port of Portland slowdown caused an unexpected and lasting negative impact on the hay market, says Susan Capaldo, head of OSU’s department of applied economics.

The Port of Portland slowdown took the wind out of the exported hay market, and they never came back from that,” Eleveld says of those businesses who found ports elsewhere when Portland’s Port was shut down earlier this year. 

Hay values dropped by $180 million in 2015 compared to the year before, according to figures from the USDA’s National Agricultural Statistics Service.

The slowdown impacted other states as well.

“It’s not just Oregon produced wheat; it’s wheat coming from Montana and other parts of the north central region that goes to the Port of Portland,” Capaldo says. “It really does impact the agricultural sector big time.”

Other ag sectors are looking up.

The grass and nursery industries are benefitting from a bustling housing market. Despite spotty rain, Eleveld says demand from the construction industry and housing boom has given the once faltering industries a boost.

“[The grass and nursery industries] were strongly impacted by the housing crisis of 2008 to 2010,” he says. “But construction has come back really strong.”

Eleveld says the fall fruit harvest is on track. Pears, which account for $152 million of the state’s $5.4 billion crop output, remain strong, as is Oregon’s smaller apple crop, which accounts for about $44 million. 

Capaldo says the wine industry can expect another strong year, thanks to the warm spring.

“Last year and the year before were just incredible for wine grapes,” she says.

The wine grape sector has grown 308% in the last 10 years and now accounts for $147 million of the state’s crop output. In 2015 production value was estimated at $147 million.

Livestock — at $914 million annually, Oregon’s largest and most lucrative agricultural product — is struggling.

“Consumer beef prices dropped sharply last year so there was some sell-off of the breeding herd and of course that means declining production of calves as well,” Elevald says. Prices will remain low this year and next, which limits the ability to rebuild breeding herds, he says.

Many of Oregon’s livestock are sold to Washington or California as replacement breeding cows or go into feedlots.

“Oregon is a little bit unique in beef because we really don’t produce beef; we produce calves,” Eleveld says.

Fortunately, he adds, Oregon ag is a highly diversified sector.

“If one of the sectors is down, some other sector is up to compensate,” Eleveld says.