Agriculture’s importance to Idaho continues to grow

Hay is cut in a field near Kuna, Idaho, on June 27. A University of Idaho report shows that agriculture's contribution to the state economy is continuing to grow.

BOISE — A University of Idaho report shows that farming’s contribution to Idaho’s overall economy is continuing to grow.

Not too many years ago, with the high-tech manufacturing sector booming in Idaho, some people assumed agriculture was a dinosaur whose importance was on the wane, said UI Agricultural Economist Garth Taylor.

“That just simply has not been true,” Taylor said. “Agriculture is big and we’re growing; we’re not declining.”

That is backed up by the UI report, “Economic Contribution of Idaho Agribusiness.”

The report, based on 2014 data, is an update of a previous report based on 2012 data.

The latest version shows that agriculture directly and indirectly is responsible for 16 percent of the state’s total Gross Domestic Product. That’s up from 14 percent in the previous report.

“Agriculture is still a powerhouse in the state’s economy despite the weakening ag economy in the United States overall,” Taylor said.

Taylor said it’s no surprise that agriculture is big in Idaho; everybody knows that. But a deeper dig into the data shows a not-so-well-known story.

GDP from production agriculture has grown twice as fast as the state’s overall GDP since 1997 while the food processing sector’s percentage of state GDP has increased slightly during that time.

So, Idaho agriculture’s GDP growth is being driven mostly by “grandma and grandpa on a tractor,” Taylor said. “That’s the amazing fact in this.”

The report was authored by Philip Watson, an associate professor in UI’s Department of Agricultural Economics and Rural Sociology. It is based on several sources, including data from USDA and the U.S. Bureau of Economic Analysis.

It shows that Idaho agriculture was responsible for $27.8 billion in sales in 2014, up from $25.1 billion in 2012, as well as 128,200 jobs, up from 124,000.

“That’s certainly a sizable amount of Idaho’s economy,” Watson said.

Watson said that before the recent recession, many people assumed high-tech manufacturing would replace agriculture as the most important part of the state’s economy.

“That hasn’t materialized yet,” he said, adding that agriculture has strengthened its hold on that top spot since the recession. “Tech manufacturing took a hit during the recession and agriculture didn’t. It hasn’t been booming like agriculture has.”

UI Agricultural Economist Ben Eborn said that while the latest report is great news, it should be noted that 2014 was a record year for Idaho agriculture in terms of total farm cash receipts.

Still, he added, agriculture’s importance to the state’s economy should remain large in the next report, which will be based on 2016 data.

“It’s not going to change much,” Eborn said. “Agriculture is still going to be a major, major factor in our economy.”

The report also shows that agriculture is much more important to Idaho’s economy than it is to the economies of surrounding states, even rural, ag-driven ones.

Agriculture’s share of Idaho’s economy is 10.5 times gather than in Nevada, 4.75 times greater than in Wyoming, four times greater than in Utah, 3.75 times greater than in Washington, three times greater than in Oregon and 1.75 times greater than in Montana.

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