Close this search box.

2022 Ag Outlook in Columbia Basin Looks Strong, Albeit Spendy

With another year in the books for the agriculture industry here in the Columbia Basin region it is a great time to reflect back on what was and look forward to what we can expect for the coming year.

At the start of last year, it was pretty hard to be excited about agricultural commodity markets. Not that they were bad but they sure weren’t good, and it was hard to project much more than breaking even on many farm budgets for 2021.  Fast forward to today and prices have improved considerably with alfalfa hay being up 35% to 40% versus January of 2021, grain corn up 20% and soft white wheat up about 50% from the previous year.  As always agricultural prices are all over the board, some are contracted, like potatoes for processing into French fries and others are sold and consumed in a short window like asparagus or cherries.  However, I’m having a hard time thinking of any agricultural commodity that went down in price year-over-year.

Unfortunately, it isn’t all about price – one has to take into account yield and cost of inputs such as fertilizer and labor.  Our summer weather didn’t help on either front with the extreme heat wave in June and July of 2021 affecting yields across the board. While in some cases crops were only affected marginally such as alfalfa, others resulted in complete losses like cherries that were just getting ripe but weren’t quite ready to be picked. The summer heat continued to eat into profit yields as additional money also went towards things like higher harvest labor. For the crops that were ripe during the heat wave, many farmers had to switch to harvesting at night, adding on extra expenses to help keep their crews safe.

Inputs such as diesel fuel, fertilizer and chemicals weren’t too bad in 2021, if a farmer purchased their inputs earlier in the year.  However, these inputs have increased significantly throughout the year, with diesel up about 50% from the start of the year to the end.  Fertilizer and chemicals have increased that much and more especially with the supply chain issues.

So where does that leave us for this next year?  I’m cautiously optimistic, but if you know me, I’m generally optimistic.  Having been raised on a farm, graduating from high school in 1983 and making the decision to study agriculture in college during the worst time period in ag since the Great Depression, like most involved in the industry I’m pretty optimistic.  That being said, the good prices right now are being driven by relatively low inventories and that generally carries into the next crop year.  But, and I mean a big but, input costs have soared and there is a very real concern about not only price but availability of certain items, such as chemicals that often have part of their formula manufactured overseas, especially those in China.

I do believe the adage that “high prices cure high prices” and we will see the supply lines open back up to more normal levels.  I wish I could say when this will happen, but as we know based on the last couple years, predictions are fun, but often times like a broken clock – only right 2 minutes out of 1,440 minutes in a day….

Bill Shibley

Senior Agricultural Officer

William “Bill” Shibley has spent over two decades working in the agricultural lending industry. After graduating from Oregon State University with a degree in agricultural and resource economics, he relocated to the Tri-Cities in 1994 where continues to live and work today. Outside of the office, Bill spends much of his time supporting the farm and agricultural communities as President of the Washington State Wine Industry Foundation, 4-H Club Leader, and member of the MyTri 2030 Agriculture Steering Committee.

To learn more about our agriculture and business lending opportunities, visit our Business Lending page to find a finance option that meets the needs of your business.


This memorandum expresses the views of the author as of the date indicated and such views are subject to change without notice. Community First Bank, HFG Trust, and HFG Advisors have no duty or obligation to update the information contained herein. Further, Community First Bank, HFG Trust, and HFG Advisors make no representation, and it should not be assumed that past investment performance is an indication of future results. Moreover, wherever there is potential profit there is possibility of loss. This memorandum is being made available for educational purposes only and should not be used for any other purpose. The information contained herein does not constitute and should not be construed as an offering of advisory services, banking services, or an offer to sell or solicit and securities or related financial instruments in any jurisdiction. Certain information contained herein concerning economic trends and performance is based on or derived from information provided by independent third-party sources. Community First Bank, HFG Trust, and HFG Advisors believes that the sources from which such information has been obtained are reliable; however, it cannot guarantee the accuracy of such information and has not independently verified the accuracy or completeness of such information or the assumptions on which such information is based. This memorandum, included the information contained herein, may not be copied, reproduced, republished, or posted in any form without the prior written consent of Community First Bank and/or HFG Trust and/or HFG Advisors. HFG Advisors, Inc, is a wholly owned subsidiary of HFG Trust, LLC. HFG Trust, LLC is a Washington state-registered Trust company and wholly owned subsidiary of Community First Bank.