MID COLUMBIA PRODUCERS, INC.

P. O. BOX 344, MORO, OREGON 97039-0344

(541) 565-3737 (800) 325-9327

January 2010

P. O. BOX 344, MORO, OREGON 97039-0344

(541) 565-3737 (800) 325-9327

September 2002

Updated Web Site http://www. mcpcoop.com

Web Site http://www. mcpcoop.com

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WHITE WHEAT MARKET INFORMATION

2009 has been a fun year to be in the grain trading business. We have seen many opportunities and price changes. We did not see the volatility we saw in 2008, but we still saw plenty of changes. What will 2010 have in order? There are arguments for $3.50 and arguments for $6.00.

Reasons for $3.50:

US carryouts (as a percent of use) are expected to jump from 30% last year to 42.5% this year (none of which is owned by the US government). World wheat stocks are at an eight year high. Many areas of the world are projecting increased plantings so average to good crops will mean carryouts around the world will increase. The US dollar has decreased in value but is still relatively strong as the US is still seen as one of the safer places to invest money. Currently, wheat prices are being propped up by corn prices. The corn prices reflect a slow harvest and potential quality issues. As more is known about quality and the amount of supply, corn prices could drop, bringing wheat with them. Speculators and hedge funds are investing heavily in commodities at the moment as they see a potentially high return vs. risk. If investment drops off and the futures markets are forced to reflect market fundamentals, prices should drop. The Willamette Valley is supposed to raise roughly 15% of the NW crop. Many of these bushels will pressure the Portland market during harvest. Will it be enough to impact prices? If so, watch for harvest prices to reflect the supply pressure.

Reasons for $6.00

Some estimate that there will be roughly 3.1 million acres less of all winter wheat plantings this year due to late corn and soybean harvest. That would have a major impact on US supplies on wheat. A drought elsewhere could tighten up supplies creating a better pricing market. The speculators and index funds could stay heavily invested in commodities for the rest of the year. This will keep prices high. Currently, wheat is cheaper to feed than corn in many parts of the country. If a large amount of supplies are fed then carryouts will be diminished and prices will reflect lower supplies. World consumption of meat continues to go up, so every year the grain demand increases as well. Each year we must raise larger crops just to keep pace with this demand. Drought is the major factor that could push production down and leave us with higher prices.

ACH (automated clearing house – Direct Deposit) Please remember we have direct deposit available for your grain checks. This is a great way to avoid going to the bank and to get your payment a couple of days earlier. If you have a bank or other creditor with a lien on your crop, we cannot issue your grain payments using this tool.

Thank you for the honor of serving you!

Grain Processing Plant

541-442-5555 or 888-442-5556

The seed division is looking forward to seeing everyone in the coming new year. This spring we will have Alpowa and Alturis for our soft white varieties, Camas for our grain Barley and Hay Bet for our forage crop.

It was a great year in 2009; we look forward this coming fall to introducing the new variety Skiles. It will have more winter tolerance than Madsen with the same maturing date as Stephens. It will be very disease resistant and should make a great addition to our lineup. It was named after Dick Skiles, and we hope it does as good of job for us as Dick did for the Oregon Wheat Industry.

To contract spring or fall seed and prices call Lee or Jerrie at the Wasco seed plant, 541-442-5555 or 888-442-5556.

MARK YOUR CALENDAR

Please join us at the Market breakfast meetings

Gilliam County Friday 7 a.m. Jan. 15, Jan. 29, Feb 12, and Feb 26, at the Gilliam County Extension Office

Morrow County Thursday 7 a.m. Jan. 7, Jan 21, Feb 4, and Feb 18 at the Office Bar and Grill in Ione

Sherman County Friday 7 a.m. Jan 8, Jan 22, Feb 5, and Feb 19 at the Senior Center in Moro.

Wasco County Tuesday 7 a.m. Jan 12, Jan 26, Feb 9, and Feb 23 at We3 Coffee and Deli in Dufur.

WASCO FARM STORE

541-442-5701 or 800-442-5703

Store Hours---------Monday through Friday 8 am to 5:30 pm Saturday 8 am to 1:00

It’s 2010 and The Wasco Farm Store crew is gearing up for a GREAT year. Electric fence, barb wire fence, field and farm fence, hog panels, water troughs, feed troughs, chicken wire and more….all in stock, priced competitively, and ready to go!!!!

Cold weather will be with us for a while longer…The farm store has Muck Boots…all 20 % off for the month of January…. Also…BIG SALE on women’s Justin Boots….30% off on any pair in Stock!

Remember, The Farm Store always has Free coffee, lots of great snacks, Pepperoni sticks for $1.00, Pepsi products, Earth2O water, paper towels, drain cleaner, Advil, flashlights and much, much more in its great convenience store section.

Mark Mobley and crew say, “Thanks for shopping at the Wasco Farm Store, you are awesome!!!!”

If it’s not here we will get it and quick !!!

Fuel Department.

The fuel market appears very range bound. There are factors pulling it both directions and none of them seem to take hold and set direction. However, recent Department of Energy (DOE) reports seem to point to stabilizing of this market. First of all, there are still very large inventories of diesel in the United States. As of 12/25/09 there were 159 million barrels of diesel product in storage, an 11% increase from a year ago when prices were much lower. However, stocks have been coming down in recent weeks. Crude oil and gasoline inventories are virtually unchanged from a year ago. Recent DOE reports have shown refinery utilization at a little over 80%. They are usually running at 87% this time of year. This has resulted in draws in gasoline and diesel and could result in tighter supplies if this trend continues. Another factor to consider is that we have seen economic activity at the wholesale level improve.

We have been thinking and telling customers that we believe prices should drop off with such high inventories for sometime. Our recommendations may change soon if we see the inventory trends continue and economic activity improve. We are also watching to see if the recession will deepen rather than strengthen and whether speculators and investors continue to play such a big role in the fuel markets. Call for our latest thoughts!

We have a number of fuel pricing tools for you to utilize. They are easy to use and we look forward to helping you with them! Please contact Jeff Kaser at (541) 565-3737 to discuss these options.