Idaho net farm income is projected to jump 50% from 2018 to ‘19, to a record-high $2.7 billion, helped by some higher commodity prices and lower expenses.
University of Idaho agricultural economist Garth Taylor told the state legislature’s Economic Outlook and Revenue Assessment Committee Jan. 2 that 2020 prospects are mostly good for the sector, which is a big contributor to the state’s economy.
He expects another year of good milk prices, which rose 19% last year after being down for several years, and an increase in dairy herd headcount — a positive for the forage segment. Beef prices likely will be steady, as will costs for many agricultural inputs. Land prices are expected to increase.
Export opportunities would improve if the U.S. ratifies trade agreements, though a strong dollar and a large global supply of grain pose continuing challenges, Taylor said.
Foreign markets will remain critical in that agriculture in the long term “is not going to grow by Americans eating more,” he said. “The export market is where growth is going to happen.”
Agriculture accounts for about 21% of Idaho’s total exports, Taylor said.
Ag cash receipts in the state rose an estimated 10% in 2019 to about $8.3 billion, after rising by 2% and 1% in the previous two years, respectively. UI’s new Financial Condition of Idaho Agriculture 2019 report said the new total trails the 2014 high by just 6%.
Livestock and milk receipts increased. Taylor said cattle and calves comprise nearly 60% of ag cash receipts in the state and more than 75% if hay and other feed crops are included.
Barley, potatoes and sugar beets posted the biggest year-to-year gains in crop receipts, offsetting modest declines in hay and wheat, UI reported. Except for beets, crop revenue is recorded on a calendar-year basis and includes parts of recent and previous growing seasons.
As for net income, which takes expenses into account, the projected 50% gain, to a level about 41% above the 10-year average, compares to a 37% increase in 2018. It fell each year from 2014 to ’17, which saw a 27% drop. Projected ’19 net income constitutes about $6.6 billion in expenses, roughly unchanged from a year earlier, subtracted from $9.3 billion in revenue, up 11%. Revenue sources in addition to crop and livestock cash receipts include machine hire and custom work, government payments, inventory changes and the estimated value of home consumption.
Expenses in the past year increased for labor but dropped for fertilizer, chemicals, fuel and loan interest, UI reported. Slight gains materialized for machine hire and custom work, repairs, storage and marketing. Feed, seed and replacement livestock costs held steady.
Taylor said Idaho has the nation’s fifth-largest agricultural economy as expressed by the ratio of farm Gross Domestic Product to the state’s total GDP. South Dakota leads, followed by North Dakota, Nebraska and Iowa.
Idaho’s farm GDP has grown some 40% more than its total GDP in the last 20 years, he said, largely on production gains. The state gets about 18% of its total economic output and one in eight jobs from agriculture.
Crop diversification, a sizable food-processing segment and the big livestock industry make agriculture a big contributor to the state’s economy, Taylor told lawmakers.