A WSU Impact Center study contracted by the Washington State Department of Agriculture found most Washington farm sectors lost competitive ground to peer states and national trends between 2017 and 2023, while potato production was an exception that gained relative share. The department told the House Agriculture & Natural Resources Committee that an interim report is expected in December and a final report by June 2026.

The study, presented to the committee by Thomas B. Mick endowed chair Randy Fortenberry of Washington State University, analyzed six commodity groups and small/diversified operations and used enterprise budgets, surveys of producers and shift-share analysis to compare Washington’s growth versus national and peer-state trends. “Competitiveness is assessed based on relative growth rates,” Fortenberry said during his presentation.

Why it matters: the study ties declining competitiveness to rising production costs that outpaced farm-gate receipts in many sectors. Fortenberry said producers in multiple commodities reported significant portions of revenue dedicated to complying with state-level regulation — for example, survey results cited about 26% of dairy revenue and roughly 46% of potato revenue devoted to regulatory and wage-related costs in the budgets the impact center assembled. Farm returns in several surveyed commodity budgets were negative for 2023 after those costs were included.

Key findings presented to the committee included: dairy producers reported roughly 26% of revenue went to compliance-related costs and a net return of about negative $2,587 for the year modeled; grape producers’ reported compliance share was reported at about 76% of revenue and modeled net returns near negative $4,000; potato producers reported a high regulatory/wage share but positive modeled returns of about $1,400 per acre in 2023. Fortenberry said potatoes were the only commodity in the analysis that showed a sustained improvement in competitive share relative to peer states.

The shift-share results and location-quotient calculations indicated Washington’s specialization in several commodities (apples, wheat, grapes, hops in particular) had declined relative to national peers over the 2017–2023 window, with the exception of potatoes. Fortenberry summarized: “Shift share analysis suggests that the overall competitiveness is declining. Competitiveness relative to our peer states is declining in Washington for all sectors except potatoes.”

The department and researchers told the committee producers identified labor-related costs (wage levels, overtime, and associated compliance) and time spent on licensing and chemical application records as significant contributors to compliance expense. Fortenberry cautioned the composition of precision-ag tools and adoption varies by practice: “If you were to ask how many farmers are using GPS in some shape, size or form, that number is very high. But if you say how many of them are actually actuating variable rate irrigation systems, that number drops significantly.”

Federal and international trade shifts also emerged in the presentation as drivers of uncertainty. Fortenberry reviewed how tariffs and retaliatory measures in prior years — and recent tariff moves — affected exports of wheat, soy, apples and other products and noted that trade disruptions can lead to multi-year losses in market share. He told the committee the 2018–19 tariff episode caused large reductions in some export markets and that rebuilding lost markets can take years.

Discussion and next steps: the Department of Agriculture said it contracted WSU to identify structural and non-structural improvements and is reviewing the impact-center’s work with stakeholders; the department plans to publish an interim report in December and a final package by June 2026. Committee members pressed for more granular data and asked researchers and agency staff to return with policy options to address the cost and access issues producers described.

Ending note: committee members asked for the study materials and the impact-center contact information; the presenters and staff said the full report and slide deck would be shared with committee members for follow-up.