By SEAN ELLIS

Capital Press

Idaho agriculture set a record for total net farm income in 2012 despite the fact that expenses also reached a record level.

Growers always face slim margins, "but margins got a little wider last year," said Travis Jones, executive director of the Idaho Grain Producers Association. "Prices were pretty robust and less volatile than we've seen in the recent past."

University of Idaho economists project that net farm income reached a record $2.57 billion in Idaho in 2012, 5 percent higher than the former record set in 2011.

However, as Jones adds, whenever farm revenue increases, "input costs also seem to magically creep up with the value of crops."

UI agricultural economists estimate Idaho farmers' expenses at a record $6.13 billion in 2012, an 8 percent increase over 2011. Farm origin inputs, such as purchased livestock, feed and seed, were up 13 percent, manufactured inputs, including fertilizer, fuel and electricity, were up 5 percent, and all other inputs together were up 6 percent.

Total U.S. net farm income in 2012 is estimated at $114 billion, down 3 percent from 2011.

Idaho's new record for net farm income came despite the rise in expenses and a 15 percent drop in government payments to Idaho farmers and ranchers.

But it wasn't a rosy picture for all commodities, including dairy and potatoes, the state's No. 1 and No. 3 cash crops.

"Record net farm income does not mean that all is well with Idaho agriculture," said Paul Patterson, one of the authors of UI's annual Financial Condition of Idaho Agriculture report, which contains the estimates.

The dairy industry is struggling with high feed costs and high debt levels, and fresh potato prices are weak, he said.

Despite the difficulties in some farm sectors, others fared well.

Last year was still a record for net farm income even in inflation-adjusted dollars and the $2.57 billion total was significantly higher than the former record of $2.18 billion set in 1974 and 114 percent above the 43-year average.

"I think (most farmers) are doing pretty well," said Caldwell area farmer Tony Weitz, who grows peppermint, field corn, wheat and alfalfa seed, four commodities that fetched good prices last year. "From my point of view, at least, everything was pretty good."

The fact that some sectors struggled much more than others is to be expected given the nature of farming but the overall net farm income number presents a positive picture of Idaho agriculture, said UI ag economist Garth Taylor.

"When corn farmers get record prices, that squeezes margins on the feedlots and vice versa," he said. "If hay prices are way down, margins on that cow price really go up."

UI's report forecasts expenses to rise 3-5 percent next year and for Idaho net farm income to be down about 15 percent to $2.2 billion, but Taylor is more optimistic.

"I think we will set records again for both gross revenue and net income," he said.