Idaho Expected To Set Record For Farm Net Income
Idaho’s net farm income for 2019 is expected to be up 50% from 2018. Net farm income, which represents revenue minus the costs of inputs and production, could reach $2.7 billion — a record high.
“That’s a pretty big spike,” said Ben Eborn, an agricultural economist at the University of Idaho who put together a presentation on Idaho's agricultural economy for 2019.
Eborn said milk, cattle and potatoes — three of Idaho’s top agricultural products — are responsible for much of the growth in net farm income.
Revenue from milk was up 19% from 2018, in part because milk prices started to rise toward the end of 2019 after a couple years at break-even levels. Additionally, Idaho dairy farmers produced a record 15.5 billion pounds of milk in 2019.
Eborn said Idaho's dairy market grew despite dairy farm closures and bankruptcies throughout the country. Idaho was not immune to these closures, he said, but the state's dairies tend to be better equipped to withstand periods of low prices because of economies of scale.
"Idaho dairy farmers are just so efficient that their break-even is much lower — probably five or six dollars per hundredweight lower."
Potatoes also did better than expected. Bad weather during harvest in Idaho and in other states resulted in a decreased supply of spuds, which ended up raising average prices.
“That’s exactly what we needed to get the prices up,” Eborn said.
Revenue from cattle and calves, Idaho's second-most valuable agricultural product, stayed relatively flat.
Government payments to farmers were part of the bump in farm income, too, Eborn said. In 2019, Idaho farmers got 42% more in these payments than the average amount received over the past 10 years. The Market Faciliation Program, which provides direct payments to farmers affected by retaliatory tarrifs, delivered $47 million to Idaho farmers in 2019.
And while dairy and grain producers lost access to markets at times, Eborn said Idaho's exports overall didn't take a big hit last year.
“Export levels have held pretty steady, but farmers still got the government payment," he said.
Idaho, he said, saw a bigger increase in farm income compared to other areas of the country because it has livestock-based agricultural economy. So when grain prices fall, it means cheaper feed for cows.
And while Idaho grain farms struggle with low prices, too, milk, cattle and calves account for 54% of Idaho's agricultural revenue. "On a whole in Idaho, we're doing fairly good," Eborn said.
Find reporter Rachel Cohen on Twitter @racheld_cohen
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