Four crops in Idaho helped the entire agriculture industry to a year of near-record revenue, but profits were still down thanks to rising costs and the effects of higher interest rates.
Idaho agricultural revenue in 2023 totaled $11.157 billion, down 1% from the record-high number food producers celebrated in 2022, according to “The Financial Condition of Idaho Agriculture: 2023” by University of Idaho agricultural economists Brett Wilder and Xiaoxue “Rita” Du.
Information presented in December at a series of seminars across the state was made available in a University of Idaho news release.
The University reports sugar beets, potatoes and barley crops all saw record revenue in 2023; up between 14% and 25%. Cattle revenue increased 18%.
Those increases helped balance out an 18% decline in dairy receipts. The state’s top commodity brought in $3.5 billion, or about one-third, of all ag revenue. Illustrating dairy’s struggles, the report noted the U.S. Department of Agriculture’s Dairy Margin Coverage Program paid out in Idaho every month this year.
Hops, the flower used to flavor beer, saw increased yields on fewer acres planted, but lower prices this year thanks to a surplus from previous harvests. The U.S. Department of Agriculture reports Idaho hops sold on average for $5.40 per pound, the lowest price since 2019 and .50 less than a year ago.
That mirrored a national trend which saw a 9% drop in the total value of the domestic crop this year.
Nearly three quarters of all domestic hops are grown in Washington State; Idaho accounted for 16% of the U.S. crop this year, Oregon 10%.
Despite the near record-revenue, overall profits for Idaho farmers and ranchers were down 11% in 2023, at nearly $3.77 billion.
Increasing expenses were mostly driven by high interest rates. Farmers’ interest expenses are estimated to increase 42% to $714 million in 2023. Idaho farmers are also expected to take a hit from reduced government payments, projected to decline by 22% to $153 million for this year.
But the state still fared better than the national average, Wilder said.
“The U.S. is down 17%, so we’re still outperforming the rest of the country. Farmers and ranchers did well in 2023.”
Looking ahead, economists predict milk prices will rise in 2024, primarily because the U.S. has the cheapest dairy prices, which should give producers an export boost. Idaho is also poised to add new dairy processing capacity.
Feed prices, both of hay and grain, are expected to decline in the coming year, and other costs are expected to remain flat or decline slightly. But Wilder expects the market for cattle and calves will be especially strong in 2024 due to the combination of extremely tight inventory and strong demand. Cattlemen are keeping their animals much longer to increase carcass weight, he said.
While labor costs will continue rising next year, interest rates are expected to start to come down. Wilder though, predicts another drop in the overall value of Idaho’s agricultural output.
“My expectation in 2024 is we should be down below $11 billion [revenue] but still above $10 billion, unless something catastrophic happens,” he said.
