Spokane-based Northwest Farm Credit Services has posted net income of $114.1 million for 2007, up from $109.4 million in 2006. The federally chartered ag-lending cooperative also says that as of Dec. 31, its net loans had climbed to $6.5 billion, up by 13.7 percentor $787 millionfrom a year earlier.


Thanks to its strong year, Farm Credit returned a near-record $28 million to its customers through its patronage program, says President and CEO Jay Penick.


We felt like we had a really nice year from the standpoint of loan growth and net income, Penick says. Unlike in 2006, when the cooperative boosted its net income when it reduced its allowance for loan losses, its 2007 results werent helped by any unusual events from an accounting standpoint, he says.


I think 2008 will be another good year for ag producers, Penick says. Still, he says, onion growers, nursery operations, and timber companies werent as profitable in 2007 as they had been previously, and weaknesses in those industries will continue at least through this year.


Hog, cattle, and poultry producers also face challenges because the cost of feed has shot up as grain growers have put more acreage into crops that can be used to produce ethanol and less acreage into feed grains, Penick says.


Its the other side of the grain equation after demand for biofuel feedstocks led to notable increases in the number of acres planted, Penick says.


The outlook remains strong for wheat growers and pea and lentil growers, who plant most of the acreage in the Palouse, he says.


I believe the Palouse and the surrounding counties to Spokane County should have another pretty good year in 2008, Penick says. Growers there have an opportunity to lock in some pretty good prices through forward sales of part of their crops in the futures market, he says.


Farm Credits total assets had climbed to $7 billion as of Dec. 31, up from $6.2 billion a year earlier. The cooperatives delinquencies had fallen to 0.6 percent of loans, down from 0.7 percent a year earlier.


The cooperative serves almost 13,000 farmers, ranchers, agribusinesses, commercial fishermen, timber producers, rural home owners, and crop-insurance customers in Washington, Oregon, Idaho, Montana, and Alaska and has 44 branch offices.


Contact Richard Ripley at (509) 344-1261 or via e-mail at editor@spokanejournal.com.