BOISE — Agriculture in Idaho is down from its glory days of a few years ago but the farming sector continues to play a major role in the state’s overall economy.
Idaho’s gross domestic product grew at the third-fastest rate in the nation during the second quarter of 2016. The increase was driven by the state’s agricultural sector.
According to the U.S. Bureau of Economic Analysis, Idaho’s total GDP grew at an annualized rate of 2.8 percent during April-June when compared to the previous three months.
“Idaho (GDP) went strongly positive in the second quarter and leading the way was agriculture,” said University of Idaho Agricultural Economist Garth Taylor.
That rate, which is inflation adjusted, outpaced the national growth rate of 1.2 percent for the second quarter. Idaho ranked third behind Nebraska (4.3 percent) and Utah (3.3 percent).
Agriculture accounted for 55 percent of Idaho’s total 2.8 percent GDP growth during the second quarter, according to the bureau.
“It’s pretty astounding that over half of that was contributed by agriculture,” said Ethan Mansfield, a regional labor economist at the Idaho Department of Labor.
Idaho farm GDP had declined 8 percent in the first quarter of 2016 when compared to the fourth quarter of 2015 but rebounded during the second quarter.
Total farm GDP in Idaho during the second quarter was an inflation adjusted $2.94 billion, a 9 percent increase over the first-quarter total of $2.7 billion.
Idaho farm earnings totaled $1.81 billion during the second quarter of 2016, up 7.7 percent from $1.68 billion in the first quarter, and farm proprietors’ income totaled $1.14 billion during the second quarter, up 12.9 percent from $1.01 billion.
While the upturn in Idaho ag GDP is good news, the sector can experience some wild swings, both up and down, from quarter to quarter because of fluctuations in farm commodity prices, Taylor said.
“We know that agriculture is volatile,” he said. “Even during the boom years for agriculture, we see some quarters where GDP in agriculture declines.”
According to a study by UI ag economists, the state’s agricultural sector is directly and indirectly responsible for 14 percent of Idaho’s total GDP, 1 in every 7 jobs and 20 percent of sales.
Though total cash receipts and net farm income in Idaho are off significantly from their records of a few years ago, farming continues to play a major role in the state’s economy, Taylor said.
He said a good sign for Idaho agriculture is that state and federal data show Idaho net farm income growing faster than the national average.
Since 1997, he said, Idaho net farm income has increased 200 percent in inflation-adjusted dollars while U.S. net farm income has remained essentially steady.
“Idaho’s growth pattern (in net farm income) is well above the national average,” Taylor said. “It’s come back down (recently) but it’s still growing over the long term.”