Posted: Thursday, September 15, 2011 10:00 AM
Farm earnings rose 17 percent in 2010, economists say
By SEAN ELLIS
BOISE -- Agriculture was the main reason total personal income in Idaho rose 1.8 percent during the first quarter of 2011, the largest annualized quarterly increase the state has experienced since the recession began in December 2007.
Personal income is the statewide total of wages, salaries, business profits, investment earnings and transfer payments such as Social Security and unemployment benefits.
The U.S. Bureau of Economic Analysis estimates Idaho's personal income during the first quarter was a record $52.3 billion on an annualized basis, an increase of $928 million.
While total industry earnings in Idaho rose 0.8 percent in the first quarter compared to the final quarter of 2010, farm earnings in Idaho rose 13.93 percent. Total farm earnings in Idaho during the first quarter were $2 billion, which was $245 million more than the fourth quarter of 2010.
Excluding investment income and government transfer payments, "agriculture was responsible for the entirety of the gain in personal income in the first quarter," said Bob Fick, a spokesman for the Idaho Department of Labor.
Farm earnings in Idaho also rose 17 percent in 2010, leading the state's 2.7 percent gain in personal income last year.
Fick said that while agriculture accounted for 4.5 percent of total industry earnings in 2010, it accounted for 30 percent of the total increase of $681 million that year.
"From that, you can legitimately argue that agriculture pulled more of its weight than normally would be expected of it," he said.
Personal income in the manufacturing and construction sectors fell $170 million and $11 million, respectively, during the first quarter. Government payrolls fell $21 million and earnings from the real estate sector dropped $9 million.
While wages and salaries fell one-tenth of a percentage point during the first quarter, business profits rose 5.7 percent and the state's farms and ranches accounted for more than three-fourths of that growth.
The numbers attributed to agriculture are just farm and ranch earnings; they don't include secondary economic activity agriculture is responsible for such as processing and transportation.
Agriculture's strong performance during an otherwise struggling economy doesn't come as a surprise to University of Idaho agricultural economist Paul Patterson.
"Overall, we've just got much better commodity prices for agriculture," said Patterson, who says the gains are propelled by price rather than production increases. "If you just look at prices growers are receiving for almost any commodity ... that's basically accounting for a substantial amount of that increase."
Patterson expects the personal earnings gains to continue based on current prices.
"Whether it's hay, beef, barley, potatoes, sugar beets, or dry beans, it looks like prices will stay strong, certainly through the rest of the marketing year, for these commodities," he said.