Ag unlikely to repeat 2011 production records

Sean Ellis/Capital Press Employees of Hamanishi Farms in Fruitland, Idaho, lay drip tape in a mint field. Despite expected strong performances by mint and many other Idaho crops in 2012, ag economists and farmers don't anticipate a repeat of last year's records for farm gate receipts and income.

Rising costs, slipping revenue dampen expected profits

By SEAN ELLIS

Capital Press

Idaho agriculture is unlikely to repeat its monumental 2011 performance, when records for total cash receipts and net income were shattered. However, farmers and ag economists say 2012 should still be a good year.

Making a concrete forecast right now is difficult because of price changes, and some crops that didn't fare well last year, like onions, have seen significant price increases in 2012.

But Idaho agriculture had a banner year in 2011 that's unlikely to be repeated in 2012, University of Idaho Agricultural economists Paul Patterson said.

"It's unlikely we will break last year's records. Not impossible, just unlikely," he said. However, he added, "it's certainly not doom and gloom."

Idaho's farm community is still doing well this year, just not at the levels reached in 2011, when farm gate receipts totaled $7.4 billion, far above the previous record of $6.22 billion set in 2008.

Idaho farmers and ranchers also raked in a record $2.64 billion in net farm income last year, which broke the former record by $903 million.

Those totals were calculated by UI economists based on a calendar year, so they differ slightly from USDA estimates, which are based on crop years.

Earlier this year, UI economists estimated total farm cash receipts in Idaho would decline 6 to 12 percent this year to between $6.5 billion and $7 billion and net farm income would dip 15 to 35 percent to between $1.7 billion and $2.2 billion.

If even the high end of those estimates are realized, it would still put the totals for cash receipts and net income near their former records.

"This year should still be a profitable year for farmers," said Stan Searle, who grows potatoes and grain in Shelley.

Overall prices for Idaho's main ag commodities haven't matched those in 2011 but higher input costs are the main reason farmers expect total net farm income to be lower in 2012.

"I would definitely say it's going to be down this year (and) higher input costs are the No. 1 reason," said east Idaho grower Gordon Gallup, chairman of the Idaho Wheat Commission.

Searle expects his power bill to rise 20 to 30 percent this year because of higher rates and more power usage due to a warmer spring and summer. He's paying the highest prices he's ever paid for fuel and fertilizer.

"My costs are substantially higher this year (and) there has been a drop in market prices," he said. "This year's not bad, but our opportunity to make more money this year is less than it was last year just because of the cost of everything going up."

"In the aggregate, lower prices for major commodities and increased costs driven by higher fuel and fertilizer prices (are) going to have a double whammy on the net income total," Patterson said.

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