Agriculture industries mostly range from unprofitable to profitable. Low prices coupled with persistently elevated input costs are pressuring margins, and trade policy uncertainty is weighing on producer sentiment. AgWest expects these conditions to persist for the next year, though some producers/processors should eventually benefit from higher prices. The following details current profitability and the 12-month outlook by industry in AgWest's territory.
The latest industry outlook highlights varying levels of profitability and expectations across key U.S. agricultural sectors over the next 12 months. Almond producers are currently slightly profitable, with a bullish outlook driven by anticipated price improvements supported by stronger demand in North American and European markets. Apple producers, despite being unprofitable for the 2024 crop, are also expected to see a bullish trend, as prices for certain varieties, particularly Honeycrisp, are projected to improve throughout the season. Apple packers, who are currently slightly profitable, have a neutral outlook and are expected to continue benefiting from the larger-than-average 2024 crop.
Other fruit sectors show more mixed projections. Lemon growers are currently slightly unprofitable, and the 12-month outlook remains neutral due to weak demand continuing to affect the market. Oranges and pistachios are both slightly profitable and have neutral outlooks. In oranges, good fruit quality and improving sizes are expected to sustain demand, with potential export growth later in the season. Pistachio growers are supported by expectations of a good quality 2025 crop, minimal inventory carry-over, and solid demand, all of which should help stabilize prices.
In the potato industry, contracted potatoes are currently at breakeven levels, with a neutral outlook driven by stable pricing agreements, although some producers are facing reductions in contracted acreage. Uncontracted potatoes are slightly unprofitable, also with a neutral outlook, as surpluses in the open market have pressured prices below breakeven.
Source: AgWest