Washington wheat farmers expect a strong year for the industry with anticipated above-average crop yields and - so far - strong global wheat prices.

At the same time, farmers cautiously watch the price of fuel, fertilizer, and other overhead costs.

Although an unusually wet and cool spring in Eastern Washington delayed spring wheat planting by up to three weeks and bolstered a fungal disease called wheat rust, those in the industry say many factors are shining favorably on grain growers in the state. Elsewhere in the U.S., wheat-growing regions are experiencing more severe weather problems from flooding to drought.

Tom Mick, CEO of the Spokane-based Washington Grain Alliance, and others say the bright side of the frequent spring rain showers in Eastern Washington is the build-up of moisture in the soil, which is expected to support a good crop yield.

"We're looking forward to an above-average crop," says Mick, which he predicts could be a Washington wheat crop worth between $850 million and $1 billion.

Mick says he expects Washington farmers could produce about 144 million bushels of wheat this season, about 5 percent more than in recent years.

Eric Maier, a Ritzville area wheat producer, expects above-average production for his crop. His farm is planted predominantly in soft white wheat, and its price has hovered at close to $8 a bushel since January.

"The dry land crop looks good; we're loaded with moisture this year," says Maier. "We're looking at yields anywhere from 10 to 15 bushels per acre above average. My average is about 42 bushels per acre, so that means I could be around the 55-to-60 bushels-per-acre range."

Fred DePell, a Northwest Farm Credit Services executive vice president, says clients of that Spokane-based agricultural lender are talking about a good crop year.

"Wheat prices are very strong relative to historical prices," DePell says. "Soft white wheat prices have hung around a high $7 or $8 a bushel; that's very favorable, and red wheat prices are above historic levels."

For much of 2006, soft white wheat prices were closer to between $3 and $4 a bushel range, and in recent years, they mostly hovered around $5.

Washington wheat farmers grow five major classes of wheat: soft white, hard red winter, hard red spring, hard white, and durum, with every class having different end-use characteristics. The protein content, brand coat color, milling and baking qualities help determine the most suitable end uses for each type of wheat. In 2009, soft white wheat accounted for 73 percent of total wheat production in the state, the Washington Grain Alliance reports.

Winter wheat is planted in the fall and harvested the following summer. Spring wheat is planted in the spring and harvested in mid-summer to early fall. Most Washington state wheat farmers rely completely on rainfall for crop moisture.

Higher yields at stronger prices are projected despite a late start for spring wheat. Jason Echelbarger, co-owner of E&F Farm JV, near Reardan, says, "It was unusually cool and wet, and that got us out in the field later. I think most of the state was at least two or three weeks behind what is normal. Depending on what Mother Nature does, that will most likely push harvest in a little later as well."

If harvesting is delayed a few weeks on the other end of the growing season, farmers say they'll have to watch for weather impacts such as late-summer thunderstorms. Farmers also may lose regular harvest workers who are college students returning to classes in late summer, Maier says.

"There will be a timing issue that will be critical to get the crop off the ground," he says.

Farmers also are keeping a watchful eye on their costs this season. Fuel and fertilizer, which together account for nearly 40 percent of a farm's operating cost, both have been climbing in cost, those in the industry say.

Echelbarger says, "We have seen a drastic increase both in oil and fertilizers, also herbicides, so that has followed the increase in the price of wheat. As long as we can hold these wheat prices in the range they are today, we'll have a positive return."

In addition, farmers say they often need more than one spray application of herbicide to combat wheat rust. The rust can affect a crop's yield, and Maier is one of many farmers who've had to apply the herbicide twice.

"It's probably costing me $11 an acre for aerial application," Maier says. "It's costing me about a bushel and a half, so I need to glean another bushel."

To determine whether prices will remain high, Inland Northwest farmers must monitor wheat production in other parts of the U.S.—and the world.

Other U.S. wheat-growing regions are experiencing much more severe weather-related problems than the Inland Northwest. Flooding and heavy rains have significantly delayed or prevented wheat planting in the upper Midwest, and drought has impacted crop production in Texas, Oklahoma, Kansas, and eastern Colorado, Mick says.

DePell says, "Within the United States, I think we're going to see a decline in overall wheat production, which can have a positive impact on Washington state wheat producers."

DePell adds, however, that Inland Northwest farmers haven't been immune to weather-related diversity. He says he's heard a small number of farmers—mainly in the Palouse region—couldn't plant spring wheat at all these past few months because of heavy rainfall.

"I'm hearing that in the Palouse region, there is a fair amount of spring wheat where the ground was too wet; they flat couldn't get seed in," DePell says. "I've heard around 10 percent across the board (in amount of land)."

Internationally, it's a different outlook, with some countries experiencing above-average production. Abundant supplies are expected from India, Australia, and other countries, industry observers say. Also, Russia plans to resume its wheat exporting this year, after banning it last year because of drought conditions, although much of the lower quality wheat from that region is expected to be used for animal feed, they say.

DePell says, "We have to look at it globally (and) wheat production is up, so if we have equal to or more wheat than we have today, that says unless demand is increasing exponentially, then there's going to be downward pressure on wheat prices."

Maier says, however, about 80 percent to 90 percent of his crop is exported to the Pacific Rim, and countries such as Japan are big importers of Pacific Northwest wheat from Idaho, Washington, and Oregon.

"We're looking at a good export picture," he adds.

DePell says some of the federal crop programs, such as Crop Revenue Protection insurance, help farmers mitigate these factors by locking in a revenue amount. "We've seen across the board a lot of producers locking in price protection and production protection." It was set recently at $9.11 a bushel for Washington, Oregon, and Idaho spring wheat, he says.

Maier cites other factors influencing wheat prices, including the price of corn. He says if corn gets too expensive, that could influence prices if wheat is switched out for corn to feed livestock. All pieces of the puzzle nationally and globally are delicate, he adds, and if one piece gets pulled out, others parts of the industry are affected.

"There's a lot of positive," he adds. "The world picture influences us so much."